Lock cash away for better returns, says expert

The best way for savers to combat the impact of falling rates and inflation is to choose longer-term fixes and make the best use of tax-free allowances, an expert has advised.

George Ladds, Head of Investment and Pension Research at the Fair Investment Company, said those who can afford to lock their cash away for longer will be able to get better returns than those who choose six-month or one-year deals.

"This is because savings rates are still falling -those coming to the end of a deal will not be able to get as good rate as they could a year ago whereas those who have locked their cash in for longer are still being protected against falling rates," he explained.

According to a Bank of England report published on June 25th, last year households put £24 billion into savings accounts and took out £20 billion in new personal loans, marking the first time since 1988 that savings have exceeded new borrowing.

Posted by Ruth Bradshaw.