Savers are now almost three times more likely to invest extra money in banks than in a pension
Savers are nearly three times more likely to put extra money into a bank or building society account than into a pension, according to research.
According to one survey, nearly two-thirds (65 percent) of those with a savings account would put extra money into their savings in the next 12 months, compared with one-fifth (22 percent) who would put extra money into their pension. for standard life.
Men are more likely to choose to increase their pension (26 percent) than women (17 percent).
Nearly two-thirds of those who have a savings account would put extra money into their savings, compared with one-fifth who would put extra money into their pension.
While savings rates look more attractive as they reach their highest levels in years, contributing extra money to a pension has the added benefit of tax relief.
This is between 20 percent and 45 percent, depending on your income level, and is a significant boost to your contribution.
For example, for a base rate taxpayer to make a contribution of £100, a personal contribution of £80 with £20 tax relief is required.
This is like getting an immediate return of 25 percent of your initial contribution from the Government.
However, pension savers must save their cash until age 55 (or 57 as of 2028) in exchange for the benefit.
Helen Morrissey, head of retirement research at Hargreaves Lansdown, says: “Interest rates may be the highest we’ve seen in years, but inflation remains high at 6.8 per cent and over time this will eat away at the power of your cash savings, so it is important that you also look at pensions once you have a cushion.’