Savers may be restricting the return they get on their money by not considering investments for longer term savings, Standard Life has said.
New research commissioned by the investment and pensions company said 82 per cent of people in the UK were saving, with 17 per cent using investment based products.
The majority of savers opt for cash savings or cash ISAs, but Standard Life said the lower numbers of people using investment and pension products could impact any returns they receive over the longer term.
Head of pension policy at Standard Life, John Lawson, said: “It is encouraging to see that over 80% of us save. However, what is really interesting is where people choose to put their money, with nearly half opting for a saving account.
“This is despite the negative impact current high levels of inflation are having on interest rates which, in turn, may impact the future purchasing power of these savings.”
He said other options, depending on people’s savings goals, could allow peolpe to make their money work much harder.
In the survey of over 2000 adults, 17 per cent used investment products and 13 per cent pension products.
When asked why they did not use investment type products, 13 per cent said they did not understand them, while four per cent were unsure where to go to invest and eight per cent believed investments were only for very wealthy people.
Lawson said the industry had work to do to demystify investments and make them more accessible.
“Consumers realise a savings account might not get them the best return but they seem to go with what they know. Attitude to risk may also be a factor; bank accounts are familiar and regarded as a safe place for your money,” he added.
© Fair Investment Company Ltd