Low saver interest rates means many have turned to stock market

In the aftermath of successive and continued interest rate cuts savers rates have plummeted which has meant that many investors are now finding their way back on the stock market.

Following the sixth consecutive rate cut in five months the record low interest rates have been bad news for all savers and if banks and building societies were to pass the rates cuts onto customers then nearly half of all cash savings accounts would pay zero interest.

A Poll by Barclays Stockbrokers has found that nearly half of investors have utilized their full £7,200 tax free allowance this year and 63 percent of the investors surveyed believed that the stock market will be the best place to generate returns this year as cash Isa’s are on average paying just 1.99 percent interest.

The head of investment strategy at Barclays Stockbrokers has said that ‘cash in no longer the king’ because in a period of low interest rates investors are now thinking of how to maximize their returns by looking at more long-term investments.

In a period of economic uncertainty savers’ confidence has fallen and financial advice is also being taken hesitantly as according to Scottish Widows a large majority of savers are planning not to take advantage of the full Isa allowance and that is due not to the need to but due to mistrust.

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