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Record low interest rates can be beaten by investments

Savers suffering from seven years of low interest rates shouldn't dismiss equity-based investments, despite the market volatility, according to Wesleyan.

Interest rates have been stuck at a record low of 0.5% since March 2009*. For savers, this means any money put aside in accounts linked to the bank rate has not been working as hard as it could be if it was invested in other products that invest in the stock market, such as stocks and shares ISAs or investment funds.

Clive Ward, Managing Director of Investments at Wesleyan, said: "It is important to make proper plans if you are saving for the long term. As long as interest rates remain at this level, savers in an account linked to the bank rate will find their money isn't working as hard as it could be over the long term.

"Last year, many commentators were suggesting interest rates could rise in 2016, but now it is quite likely this may not now happen until 2017 at the earliest.

He added: "Despite recent stock market volatility, equity-based investments, such as a stocks and shares ISA or an investment bond, remain a sensible alternative for those looking to make long term investments.

"We are not complacent about the recent falls in the market and we remain mindful that there may be more uncertainty during the year. But while some people have suggested investors should move out of equities completely to protect themselves from market falls, it is worth remembering that if one of the alternatives is a cash investment, then this could hit savers even more over a longer period."

Wesleyan provides specialist financial advice and services to doctors, dentists, lawyers and teachers.

'WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Assurance Society and Wesleyan Bank Ltd are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Wesleyan Financial Services Ltd, Wesleyan Unit Trust Managers Ltd, Practice Plan Ltd and DPAS Ltd are authorised and regulated by the Financial Conduct Authority.  Advice about investments, insurance and mortgages is provided by Wesleyan Financial Services Ltd.

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© 2018 Wesleyan Assurance Society