It’s scary but not really surprising that a recent survey has found more than one million people aged 45 and over have absolutely no cash savings as they head towards retirement.
The survey by not-for-profit organisation Fair4All Finance of 3,101 financially vulnerable people found that 37% had no savings at all, a 14% increase in the numbers in just two years.
As reported by MoneyAge, it also revealed that more than half of over-45s (58%) currently have less than £1,000 in savings.
Worryingly, some 26% are now having to rely on their savings as a main source of income, while 59% currently have at least one outstanding debt.
Here at Philip J Milton & Co Plc we have and continue to support organisations such as Christians Against Poverty (CAP), which help people escape the trap of debt.
Our charity, the Philip J Milton & Co Charitable Foundation has financial education and promoting financial responsibility among its core principles – supporting projects both at home and abroad that help lift people out of poverty and debt.
So what can people do to either build up their savings or indeed to begin saving at all?
One thing Fair4All Finance suggests is for people who are struggling financially to turn to credit unions to help build up small, sustainable savings habits and develop better relationships with money.
These can be found in North Devon with a quick online search and as well as helping you to start saving, they can also provide loans to help consolidate debts and get them paid off.
Of course, you may just have got out of the savings habit – or perhaps you just haven’t really given it much thought recently?
There are plenty of savings options out there, not least ISAs, which allow you to deposit up to £20,000 tax free each year – and growing tax free interest too!
Cash ISAs are popular but typically have low rates of interest and will not really grow your savings to any great degree, especially if the rate of inflation is higher than interest rates.
There are Cash ISAs that offer higher fixed rates, currently the best are around 4-5% interest, but most are fixed rate bonds, meaning you must invest your money for a set period of time and will not have access to it.
There are also Stocks and Shares ISAs, which you can set up for as little as £50 per month investment – of course this will also increase the risk as stock markets rise and fall, so returns cannot be guaranteed.
Typically though, a stocks portfolio spread across multiple investments can weather storms and tends to deliver better returns over longer periods of time.
You could also set up a pension – it’s never too early to start and regardless of whatever work pensions you may have, a private pension is well worth having if you can make regular contributions.
Plus, people under the age of 75 will automatically receive 25% tax relief on their personal contributions.
You can also receive free impartial advice from the Government-backed MoneyHelper scheme, just visit www.moneyhelper.org.uk.
Citizens Advice also offers free independent advice on a range of issues including pensions and debt. Visit www.citizensadvice.org.uk.
