UK over 55s hoarding cash in current accounts amidst COVID-19 fears

More than a third of Brits over 55 are saving their money in low interest current accounts despite accruing more funds during lockdown.

Some 31% of over 55s have saved more money than usual due to a reduction in commuting, eating out and socialising since the pandemic struck, according to data by Ford Money. The average saving was £3,336 ($4,290).

A survey of more than 2,000 over 55s and 329 high net worth individuals with at least £100,000 investable assets, found 35% were stashing these savings in their current account rather than looking for better interest rates elsewhere.

Rachel Springall, personal finance expert at Moneyfacts, said: “Due to prevalent economic uncertainty, consumers appear to be favouring quick access to their money, perhaps more vital than securing the highest possible rate of interest.”

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The uncertainty caused by the pandemic means one in ten over 55s think they will never be financially stable enough to fully retire and a further 10% plan to delay retirement by up to five years. Meanwhile over half of high net worth individuals expect to work longer to maintain their lifestyle beyond retirement.

The findings coincide with the UK state pension age rising to 66 this week.

“There has been significant damage to consumer confidence with a third of over 55s concerned about the impact that a second wave could have on their finances and their plans to retire. This threat coupled with the state pension age rising this week means many people will be working longer to make sure they’re able to have the retirement they had planned,” Springall added.

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As the financial uncertainty looks set to continue, Ford Money’s research reveals savers are less interested in investing in shares and stocks with just one in 10 choosing to deposit their money there.

When surveying a group of high net worth individuals, over a third said the most important thing was to not take any risks with their money right now and 33% have put their extra cash in easy access savings accounts.

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