Find a safer home for your savings

By TIM HEMING

INVESTMENT plans for the over 50s could leave pensioners thousands out of pocket.

A week after HSBC was fined £10.5million for mis-selling five-year investment bonds to the elderly, the latest research from consumer group Which? shows many plans fall short of the returns from a simple savings account.
It found a 60-year-old paying £15 a month into an over-50s plan for 30 years would earn a lump sum of just £2,980.
A cash Isa paying four per cent would earn more than triple the amount over the same period.
What is worse is that the money is so locked down, many customers have to keep paying until they are 90 or forfeit their investment.
Over-50s plans are intended for anyone aged 50 to 85 who doesn't have a life insurance policy.
Customers pay a monthly premium from the age they take out the policy until they die, or until the age of 90.
In return, their family receives a payout of a fixed amount when they die, provided that they have contributed to the plan for at least one or two years.
Which? chief executive, Peter Vicary-Smith, said: "For most people, over-50s plans are incredibly bad value.
"They are inflexible and, for the majority of customers, they will pay out far less than you have paid in.
"For those that are looking to leave their family a cash sum, our advice is to steer well clear of these plans, and to put your money into a cash Isa instead."
How to make the best of your savings
WITH the average Brit approaching retirement with a savings pot of just £6,665 - and debts of £79,598 - managing our finances has never been so important.
Simon Rose from pressure group Save Our Savers, that campaigns for better returns on our dosh, warned: "There is no shortage of people trying to invest your money for you.
"But while many are perfectly respectable, there are three golden rules: Make sure your capital is secure. Never buy an investment product you do not understand. And seek the opinion of somebody you trust before committing yourself."
With the Bank of England base rate at an all-time low, and the stock market continuing to struggle because of the global economic crisis, savers are scratching around for the best places to stash their cash.
Almost a quarter of deposit accounts pay a paltry 0.1 per cent or less, meaning your wealth is swallowed up by inflation.
The total savings pot for over-55s in the last year has gone down by 27 per cent, according to latest figures fro Aviva.
And worringly, two-thirds of Brits admit to not having saved enough for retirement.
Rose continued: "All savers are losing out because the Bank of England has utterly failed to get a grip on inflation. The target is two per cent CPI and yet inflation is roaring ahead at five per cent.
"It is more important than ever to get the best rates for your savings that you have worked hard to build up.
"But if you don't have access to a computer you are at a serious disadvantage as many of the best paying accounts are only available online."
The first port of call for savers is to use up their tax-free ISA allowance - £5,340 a year with a cash ISA, plus another £5,340 a year with a stocks and shares ISA.
Pal Green from Saga, a lifestyle company, focusing on deals for the Over 50s, said: "If you are a taxpayer you should use your ISA limit to benefit from tax free saving - in the current climate every penny counts.
"If you are not a taxpayer it is important to register this fact so you can get your interest tax free."
If you can access the internet, there are a host of websites that promise to help your money grow.
Comparison sites such as moneysupermarket.com, comparethemarket.com and gocompare.com allow you to find market-leading savings deals easily - but savers need to be wary they are not fooled by the headline 'bonus' rate.
For example, Santander currently offers 3.10 per cent on its easy access eSaver account. However, this only lasts for the first 12 months, after which the rate drops to a derisory 0.5 per cent.
To beat this sales tactic a couple of innovative new websites have sprung up.
Savingschampion.co.uk keep tabs on when bonus accounts and fixed rate bonds expire and prompts users to switch finances to a more profitable account.
When you first sign up there is also a one-minute rate check so you can discover if there is a better rate available elsewhere.
Governormoney.co.uk goes one step further. It collates all your savings into one single secure account and automatically switches them to the best available rates.
Making sure any finances invested are secure is also important.
If you have a large sum of money - for example, from the sale of your home to fund your retirement - then spreading your investment around is advisable.
The Government's Financial Services Compensations Scheme will guarantee the first £85,000 of savings with any FSA-regulated bank.
That means, in the unlikely event of the banks collapsing, your savings are protected.
However, some banks have merged in recent years, so although you may think your nest egg is spread across different institutions it may not be the same owner.
For example, Halifax and Bank of Scotland both come under the HBOS banking licence. It is worth checking first.