Ideas for cash
I was featured in New Model Adviser (a Citywire publication) this week, sharing some ideas for cash in the current low interest rate, high inflation environment.
Here is what I had to say:
“We take quite a conservative view when it comes to recommendations for cash.
“We are telling our clients they should stick to UK authorised and regulated banks, and keep within the FSCS deposit limits.
“We are helping them check for any banking licence cross over that could result in them losing their protection.
“Cash savers should not generally consider moving away from cash, despite low interest rates and high price inflation.
“The potential volatility associated with every investment asset class is typically unacceptable for someone with a cash savings risk profile. It is better for savers to accept the erosion of capital in real terms than expose some or all of their money to risk.”
The Financial Services Compensation Scheme (FSCS) protects deposits in UK banks up to £85,000 per individual per bank.
Whilst the global banking system appears to be in better health than it was in 2008, savers should continue to take a cautious view of the financial strength of financial institutions.
Getting the maximum level of protection from the FSCS makes real sense for savers, particularly as they tend to have a much more cautious risk profile for this part of their wealth.