Pensioners need to 'consider savings carefully'

Due to the current low base rates, pensioners need to actively look for better investments and the best savings rates for their money.

Alan Smith, chief executive at Capital Assessment Management, explained that people in retirement often do not want to invest in things which they consider to be risky, such as the stock market, so they leave their money languishing in accounts with low interest rates.

He said that once tax and inflation have been taken into account, people may actually be losing money.

"What people need to consider doing is allocating a percentage of their savings to investments that have got a much greater opportunity to grow and generate income that's going to meet their requirements," Mr Smith said.

The best route is to allocate some funds to earn the best savings rates and put some into investments that are likely to grow at a faster rate, he suggested.

However, Save Our Savers recently warned that people are growing disillusioned with saving for retirement.

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2011-09-30 14:00:51 © Moneyextra.com