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One in four teachers taking more risk with savings as interest rates flatline

One in four teachers taking more risk with savings as interest rates flatline

A growing number of teachers in the UK are turning into risk-takers with their savings after eight years of low interest rates, according to new research by Wesleyan.

More than a quarter (26 per cent) of teachers are now taking more risk with their savings than this time last year, compared with 11 per cent taking less risk, research from the specialist financial mutual has found. Interest rates have been held at record lows since first being cut to 0.5% in March 2009, and again to 0.25% in August 2016.

More than a fifth (22 per cent) of teachers who have changed their attitude to risk over the past year did so because low interest rates made them want to seek out better returns elsewhere.

Meanwhile, wider economic events such as Brexit have made more than a third (35 per cent) take a more cautious approach to their savings.

When it comes to keeping hard-earned long-term savings, the most popular products include ISAs (57 per cent) and savings accounts (49 per cent)

More than a quarter (28 per cent) teachers now use a current account for long-term savings. The unusual shift towards keeping savings in everyday accounts could be a by-product of the ultra-low interest rate environment and increasing competition among banks offering relatively high interest rates on current accounts.

Vicki Wentworth, Chief Customer and Strategy Officer at Wesleyan, said: "Low interest rates have increased consumer spending, but they have also pushed teachers to increase their risk appetite as they seek higher returns on their savings.

"Higher risk investments can help savings pots grow, but what we're seeing now is savers taking more risk than they might normally be comfortable with to combat record low interest rates.

"We recommend all teachers take financial advice when reviewing their savings and investments. This will ensure they fully understand the associated risks and are comfortable before making decisions that could affect their finances for years to come."

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

Research based on a survey of 101 Teachers by Censuswide on behalf of Wesleyan, January 2017.

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