Low Interest Rates Mean Savers Need To Act Quickly

Expats looking to save money over the long-term will need to act quickly to ensure they save in formats that will keep abreast of inflation

London, UK (Pryce Warner International) September 27th, 2011 – A look at the minutes from this month’s Monetary Policy Committee show that the nine member panel discussed the possibility of reducing interest rates from 0.5% to 0.25%.

A move of this kind could prove devastating to savers, as the base rate of interest has been stuck on 0.5% since March 2009, while inflation has risen dramatically.

Though no formal decision was made whether or not to reduce interest rates, that the decision is under discussion implies that interest rates certainly won’t be going up any time in the near future.

One thing the committee did make clear however, is that another round of quantitative easing is looking increasingly probable.

These combined factors mean that long-term overseas savers need to quickly analyse other methods of saving that will ensure their income outpaces inflation. Expats that are retired or retiring abroad will need to be particularly careful under these circumstances.

Some analysts have suggested that Long, fixed term deposits may offer better returns for savers as the possibility of base interest rates increasing are almost zero.

Another solution some Expats are using, despite the state of global stock markets, is to start investments rather than savings.

Figures have shown that the amount of assets being put into investments by Expats went up by 49% between June and July of this year, and that this trend is set to continue for some time.

David Harra, a Senior Market & Investment Analyst with Pryce Warner International, a Financial Services Provider for Expats, commented: “The indication that base level interest rates are likely to remain low for some time indicates that Expats would be wise to consider new forms of savings if they want their assets to remain ahead of inflation. There are many investments and saving opportunities for Expats that can do this so it isn’t surprising that many have already opted to do so. We in particular offer many investment types that are currency and asset diversified and therefore are in a strong position to retain consistent growth despite turbulent market factors. Anyone retiring or planning on retiring abroad could particularly benefit from a QROPS or QNUPS overseas pension as these are a great way to ensure that your income remains secure and steady when retiring abroad.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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