Monday, February 9, 2009

Britons Are Keeping Cash in Their Homes

Keeping cash in our homes rather than in savings accounts is what five percent of us would rather do, according to MGM advantage, faith in high street banks and building societies has fallen according to the company’s recent Retirement Nation Study. The downfall of Northern Rock hit the north eastern area of Britain particularly hard. This said, confidence in these companies was at its lowest in Plymouth, it was revealed. Regardless of your wealth the trend to store your cash in your home was equally true, suggested the company.

Some eighteen percent of people struggling with personal loans and other debts also revealed they would rather keep their money beneath their mattress than trust it to a financial institute. Keeping hold of their money is what twenty five percent of respondents, with assets over one million pounds, said they would do.

Regardless of these facts, for the majority of us, we prefer to use savings accounts than any other way of investing. Fifty five percent of people asked favoured this method of saving as a means of protecting their future finances. Seventeen percent of people chose pension funds, with just over one in ten of us relying on the property market. In todays economic climate it was no surprise that just six percent of respondents would go for stock market investments.

The difference between men and women, in terms of the type of savings made, was apparent in the report. Some sixty percent of women have a savings account against just under half of males having the same. Also favouring this type of investment were the over sixty fives with again over sixty percent owning an account. Coming out on top though was the younger age group of sixteen to twenty four. This group trust financial companies most with two thirds of them owning a savings account.

Some investors are unaware of the most efficient ways of saving money, according to MGM advantage. Nearly a fifth of participants do not understand key financial terms like individual savings accounts, defined-benefit/final salary schemes, stakeholder pensions, pension credits, equity release mortgages, annuities and indeed independent financial advisory (IFA) services.

Investing in a mutual is something only ten percent of us would do. Instead of a question of trust this is probably due to a lack of knowledge. However, going to a mutual is something that double the number of those who use an IFA would do, rather than those who don't. That said, with less than a third of respondents understanding the term “mutual” it remains at the bottom end of the list of financial terms that are understood by the population. Included in these are “pension credit”, “stakeholder pension”, “defined -benefit final salary scheme”, “annuity” and “FSA”.

Talking about their financial situation is something people are not willing to do even with friends and family, according to Saga. Discussing their pension provision is something thirty eight percent of people will do whilst only fourteen percent will discuss personal loan or credit card debt.

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