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Has the UK savings industry let us down?

As the UK government today launches a program of major changes in the UK pension industry there is a growing debate as to whether the UK savings industry has let down UK consumers. When you consider the levels of debt amongst UK consumers and UK businesses, not to mention sovereign debt, perhaps the historic savings culture of the UK has disappeared forever?

One of the main reasons for saving in the UK is to enhance your retirement and maintain as high a standard of living as possible in your later years. However, over the last two years we have seen UK base rates fall to 0.5% with some savings accounts offering rates which are less than this. When you consider this against inflation which is now well over the 2% target of the Bank of England savers are actually seeing their spending power reduced on an ongoing basis.

Against this background it is not difficult to understand why more and more consumers in the UK would prefer to pay off high interest debt as opposed to save and those with savings may well be looking towards paying off their mortgages early. While the situation will not last forever it is certainly not a positive note on which to put aside as much money as possible for your later years.

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