Experts advise Britons to move money from savings accounts to stocks
London, England, United Kingdom (AHN) – Financial experts are advising Britons to shift their investments from savings accounts to stocks. The advice came on the heels of official data that in November the inflation rate went up to 4.7 percent from 4.5 percent, outpacing interest rates offered by banks or building societies.
Personal finance website Moneyfacts found that of 2,203 products on the market, only three accounts paid a real rate of return and only one for higher-rate taxpayers.
The website identified the Independent Savings Account of Santander that offered a return of 5.5 percent, which is higher than the inflation rate of 4.7 percent. However, the account has many strict conditions that depositors must meet.
The portal also named the fixed-term savings products or bonds offered by the Yorkshire Building Society and Barnsley Building Society as worthwhile for depositors because of their 6 percent rate of return.
Because of very low interest rates offered by most savings accounts, British depositors miss out on earning as much as $483 a year, according to a consumer watchdog.
Yield on the FTSE 100 index of leading shares is 2.9 percent, but many individual blue chips pay at a much higher rate, such as a 5.1 percent yield for Royal Dutch Shell stocks and 6.2 percent yield for Aviva stocks.
The higher-than-expected inflation rate led Andrew Sentance, a member of the Bank of England’s monetary policy committee, to call for an immediate hike in the current interest rate of 0.5 percent. Sentance warned that unless key lending rates are gradually increased it would be more difficult to hike them more sharply, which could cause a larger jolt to confidence in the British economy in the future.
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