pension rates

Savers urged to act quickly before pension savings rate fall



Posted on: 21st May 2020

HMRC have released new figures that demonstrate how the number of people taking money from their pensions has hit a new high. This has since led to concerns that there could be an influx of new money into the savings market that could lead to pension rates falling further. The savings market has already seen rates fall in response to the Bank of England base rate cut and the announcement of a new funding or lending scheme.

In addition to the already struggling savings market, an influx of money released from pension funds could lead to an even faster fall in rates. According to HMRC, between January and March this year, 348,000 people withdrew funds from their pensions, 23 per cent more than the same period in 2019. At the same time, there was a 19 per cent rise year-on-year during this same period of flexible payments from pensions, with £2.46 billion being withdrawn from pensions flexibly between January and March. Throughout these three months, the Bank England gathered statistics that noted a deposit of £7.8 billion into accounts that are accessible without penalty. This includes easy access accounts.

Top easy access savings rates
Out of the top 10 easy access savings rates that are currently available, not one comes from a traditional bank or building society. What’s more, the top each access rate available on the market stands at 1.15 per cent. This is .35 per cent less than it was the previous year, and 0.26 per cent less than the beginning of the year, when savers were able to get a top rate of 1.41 per cent. As such, savers should not only consider going off high-street when it comes to finding the best return on their savings, but also act fast to get an easy access savings rate before the number falls further.

You can find the full article by Money Facts here.

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