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Abstract:
Despite the recent troubles in the financial sector, savers remain calm about their savings and are not switching over to other banks, according to a leading industry organisation.
There has been no significant rise in the number of people making transfers between accounts, UK payments association Apacs has said. However, some firms themselves have said they have recently received more enquiries than usual from savers wishing to move their money to new savings accounts. Analysts at Apacs though say that no significant peak has been spotted on transactions through their Chaps transmission service which allows money to be transferred from one account to another in a day and is often used for large sums of money. The slower Bacs payment system used for telephone and online banking services has also so far not witnessed any movement of money between accounts – although this system is used for automatic payments, and so payments are made in larger numbers at the end of the month, making movements of money harder to spot in short-term figures.
As deposits of up to £35,000 are fully protected in the UK – with this figure likely to rise to £50,000 soon – banks have seen the opportunity to take full advantage of the possibility that more people will open new savings accounts in order to spread their money between various institutions. Lloyds TSB has announced recently that it will unveil two new savings accounts, including an instant access account. Alliance & Leicester meanwhile is offering a 6.6% interest rate on its savings accounts.
Nonetheless, with such a high cost of living at the eye of this financial storm, many savers are concerned too about their pensions and whether their current retirement plans will be sufficient. Analysts say that there is a wide concern amongst all age groups that the credit crunch and the global economic downturn means planning for retirement is made not only more of a challenge, but also many people fear that any plans they may make may not be sufficient to provide for themselves in the future. A recent survey has claimed that as many as 41% of people have no pension provision in place for their retirement at all. Pensions firms such as Legal & General however remain eager to market the pension funds they have available.
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