A Matter of Time

Data released by the British Bankers Association this week has revealed consumers are saving more money than last year, rising by 5.8 per cent from the previous August. They’re also shunning savings accounts for ISAs and it’s easy to see why. To beat inflation, basic tax rate payers need to find an account that pays more the 3.14 per cent and higher rate taxpayers 4.18 per cent – no easy task when the best buys are typically lower than that.

This data coincides with news that complaints about banks have risen by 59 per cent. Although PPI complaints are skewing the data a bit, apparently there is increasing concern from consumers about savings accounts, loans and credit cards too.

At rebuildingsociety.com all this tells us that people are slowly realising that savings accounts are not worth having at the moment (according to Watchdog the average interest rate is hanging around at 0.94 per cent) and are looking for better returns. However, the ISAs that these savers are targeting don’t do much better and you can still only add a finite amount each year.

So if consumers are setting aside more money than last year, want better returns and dislike the banks, they should probably try crowdfunding because they’ve got a lot in common with our users.

If someone has used their ISA allowance and wants to use spare cash productively, investing in mature successful businesses could be the answer. Returns comfortably outstrip inflation, regardless of the tax rate you pay.

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