Interest rates: Over 50s women urged to act to gain ‘financial security’ amid low returns | Personal Finance | Finance
Interest rates have been impacted by the Bank of England’s base rate decision which has held the rate at 0.1 percent since March 2020. This has meant many savers hoping to grow their money have been left with little option to do so, and in fact could be losing out as growth is less than inflation. Research undertaken by Nutmeg has shown women over the age of 50 in particular could potentially benefit by taking action on their finances.
She continued: “One reason is definitely that element of wanting to feel a bit financially better off, and having more disposable income, because we aren’t spending on leisure or holidays or hospitality.
“But I do also think cash rates have a huge role to play when it comes to thinking about investing as a whole.
“The Bank of England rate at 0.1 percent is at an historic low, and I thought it was particularly low when it hit 0.5 percent.
“We’re now sitting looking at cash accounts and thinking because of the interest rate this is not paying me anything at all.
“Indeed, the cash accounts that people went into at quite a good interest rate has now slashed those rates.
“That’s a really good and positive sign that people are really thinking about what their goals are for their money, and whether they are being best served by a poor paying cash interest rate.
“If not, an investment might be an option where people can get more bang for their buck.”
Nutmeg data showed Britons are generally moving towards investment as an option, potentially to combat issues with interest rates in recent times.
The number of female investors is generally increasing with 27 percent of new investors recorded as female in 2016, compared to 40 percent recorded as female in 2020.
However, the data also showed there still exist barriers for women over 50 when it comes to putting more money into investments.
Some 13 percent of those asked said they had no idea where to start, but 22 percent said they did not totally trust investment products.
Ms Mann concluded by offering advice to people who are considering dipping their toe into the water of investing.
She added: “When it comes to your broader financial picture, there’s also a thing to consider that if you have debt, now might be a good time to pay that down.
“Then it will be a case of looking at cash, and we usually say having about three months to cover your absolute expenses such as your rent or your mortgage, food, utiltiies and broadband alongside a bit of discretionary spending.
“But what we know is that women tend to oversave and actually keep more money in cash than perhaps is necessary.
“Interest rates are nowhere near keeping up with inflation and that’s the point to say that it is a time to see whether investing could work for you for your financial security.
“You don’t have to go all in, and you also don’t have to be a financial expert who reads the markets at four o’clock each morning.
“You can have your investments adjusted to suit your risk and your needs, and really make them work for you.”