The ‘Over 50s’ bank account has been a product on offer for several years now, older savers and investors are often tempted by them, based on the assumption that they will offer a better rate than an all-round bank account.
A study carried out by investment advisors Governor Money, has found that this is not always the case, and that older savers would be better off sticking to the same products as everyone else. Their research found that the top 20 over 50s accounts paid an average annual interest rate of 2.23 per cent, while the top 20 accounts overall pay an average of 3.17 per cent to holders of any age.
Put into perspective, this means that over year, £5000 would make £111.50 in a senior savers account and £158.50 in an account aimed at everyone. The survey increases fears that some banks and building societies are looking to take advantage of the over 50s age group.
This group controls more than 70 per cent of the country’s cash savings. Governor Money’s Chief Executive Miles Bingham stated: “Products aimed at a specific age market usually carry some kind of extra benefit, for example car insurance recognises that older drivers are statistically safer and so entitles them to lower premiums. This is not the case with savings accounts.”
“The recent ‘granny tax’ controversy has shone a light on the finances of older citizens. Labelling products as exclusive to over 50s should imply that they come with some additional benefit not available to the public at large.” Continued Bingham, “But our research demonstrates that this is clearly not the case with regard to savings accounts.”
Currently 22 different providers are offering 43 different accounts specifically aimed at over 50s. Savers of all ages are advised to exercise caution and look at all available options when making a decision about where to place their savings..