How hard are your cash deposits working for you?

Saving more money will undoubtedly be a popular new year’s resolution for many, but would-be savers could be forgiven for lacking the motivation.

At present, leaving your cash in savings can make you feel like you’re actually becoming poorer by the month.

This is because the cost of living is vastly outpacing the returns savers are making. More importantly, there is not one cash deposit savings deal that is able to keep up with the eroding power of inflation.

Inflation has been a hot topic of discussion and impossible to ignore as people across the UK feel the pinch of soaring food costs, taxes, and energy bills.

According to data released by the Office for National Statistics, prices in the UK have gone up at their fastest rate in nearly 30 years, now sitting at a hefty 5.4%.

With the cost of living currently outstripping expert projections and expected to reach higher levels in the coming months, many economists believe interest rates will increase several times this year.

Savers who continue to keep their cash in easy-access accounts with high street banks paying as little as 0.01 per cent interest may well end up 6 per cent worse off year-on-year come April.

It will mean the spending power of £1,000 sat in an account paying 0.01 per cent interest will be diminished by £60.

And even for savvy savers holding their cash in higher interest-paying accounts, it is just a case of damage limitation.

Many of us know we should be looking at our cash deposits and switching them to a more competitive deal, yet in reality many of us ‘never get round to it’ due to the perceived ‘hassle’ or for the few that may consider this, they end up not proceeding because they think that the rates elsewhere are no better.

Well there is some good news. Whether you are a business, individual, or charity with cash on deposit, MHA Moore and Smalley can review your circumstances and assist you in securing market leading rates whilst also reducing your risk through diversification thus maximising any FSCS protection available to you.

Notably, we can provide access to a cash management solution that will enable you to have access to multiple banking institutions and a variety of savings accounts to meet your objectives.

Importantly, there will be a single application process to facilitate this thus, removing that perceived administration burden.

For those individuals who have a longer-term outlook for their cash deposits now may be an opportune time to consider a stocks and shares ISA. Whilst there are other risks to consider there’s also a real chance for inflation-beating returns over the medium to long term.

Some things to consider:

· £270 billion held in cash ISA’s – earning little or no interest

· Typical easy access cash ISA rates less than 0.65%

· Typical easy access savings rates less than 0.71%

· Typical easy access deposit rates 0.01%

Get in touch and let us help you make your money work harder for you.

For more information on our cash management services please contact a member of our Financial Planning team on 01772 821021. Our initial meeting is always free and has no obligation.

This article should not be construed as advice or a personalised recommendation. The most suitable solution for you will depend on your own personal circumstances.

MHA Moore and Smalley is authorised and regulated by the Financial Conduct Authority (registration number 448716).