How much Money are you Losing while you Sleep?

While we are all trying hard to save, the latest inflation figures mean that unless you are earning more than 4.5 per cent on your savings you will be losing money. Do you take your current account seriously or do you just use it as a dumping ground for your salary and direct debits. But actually your current account is a financial product and as such we should expect a return from it whenever we have a positive balance of funds in it. Statistics still show that people rarely change their bank account, often staying with the same bank throughout their life.

When rating your bank take into account four key areas:

• The level of customer service you are receiving
• The bank charges that you are subject to
• The interest rate you receive
• The ethical policy of the bank

All these areas are important but you may rate them differently depending on your personal feelings. Don’t just focus on the interest rate you receive. Remember to watch out for hidden charges and if possible try to speak to a customer with your target bank to see if they have any experience of hidden charges. Look at the ethical policy and news articles about how and where your bank operates in order to see if it fits in with your own ethics.

In this help guide we are recommending three steps that you can take to protect your savings.

In the current climate of austerity, every penny counts – the latest inflation figures announced on Tuesday reveal another increase, this time to 4.5%. This means that £100 of your money today will be worth £95.50 in 12 months’ time – bad news for anybody with savings.

Trying to find a savings account that will give you a return on your money after allowing for inflation is needle and haystack territory. Nonetheless, it’s well worth keeping a check on your investments to make sure your money is working as hard as it can for you:

• Check what your savings account is paying. Many banks and building societies lure savers in with short term bonuses, knowing that many of us won’t bother to switch our money when these introductory rates have run out.
• Use your 2011/12 ISA allowance. This allows you to invest/save up to £10,680 tax-free this tax year, with a maximum of £5,340 in cash. Don’t suffer tax on the interest your money has earned where you don’t have to.
• Use ‘best rates’ information provided by websites such as moneysupermarket.com. Account providers are changing their rates all the time – these websites pull all the information together, so you don’t have to.

For more specific advice don’t hesitate to contact us at In The Zone, we have a range of professional advisors and accountants and are always glad to help.