New data has revealed how household savings in the UK increased this summer to a record high of £2.2 trillion.
If you are considering seeking savings advice in Shropshire, you may be wondering whether it is better to save or invest. The government has been trying to persuade people to invest more of their wealth.
Figures from the Office for National Statistics in July showed that the household savings rate reached 11% in Q1. This has been attributed to numerous factors, including uncertainty over the economy and fears of inflation. Speculation is rife that the Chancellor, Rachel Reeves, is poised to raise taxes in the November Budget. This could be prompting households to mitigate losses by holding on to their wealth.
Analysts have said that many consumers are conscious of price increases on goods, and are prioritising immediate financial security, with the inflation rate hovering at around 3.8%. Whilst saving money might be a necessary short-term move, shares invariably outperform cash in the longer run, regardless of inflation.
The MSCI world index tracks global equities. They have returned an average 12.6% per annum over the past decade. They contrast favourably with savings accounts or cash ISAs, which generally offer a far lower rate of interest. Despite this, some people remain reluctant to invest, perceiving it to be too high-risk. Financial experts often advise holding on to investments for at least five years, factoring in market volatility. For people unsure of the best financial strategy, it is a good idea to get professional advice.
