O ver-60s are being warned to “act now” in a bid to avoid leaving money on the table as the Cost of Living crisis continues up and down the country.
Millions of UK households who are over-60 urged to ‘withdraw cash and move it’
A warning has been issued for millions of UK households who are over-60. O ver-60s are being warned to “act now” in a bid to avoid leaving money on the table as the Cost of Living crisis continues up and down the country.
Mistakes over-60s are making include not claimaing Department for Work and Pensions (DWP) benefits they are entitled to, like Pension Credit or the state pension – if older than 66. Others include drawing from a private pension while still paying in, which can trigger the Money Purchase Annual Allowance (MPAA) and cut your tax-free pension contribution limit from £60,000 to just £10,000 per year.
Households are told to avoid making flexible withdrawals (like UFPLS or income drawdown) if they can, and reminded to check interest rates on their bank accounts, because many are under 1% interest as it stands.
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Households can withdraw cash and move money to an easy access savings account, with some paying up to 4.98 per cent. Alternatively, over-60s can pay their cash into fixed-rate ISAs and bonds that offer up to 4.58 per cent.
Funderer’s lead analyst said: “Many over-60s are unknowingly leaving money on the table.
“These aren’t complicated strategies — they’re simple steps that can have a big impact on financial security in retirement. Acting now can make your money last longer and give you peace of mind.”
Mark Hicks, head of savings at Hargreaves Lansdown said: “Given that markets now expect two or three more rate cuts for the remainder of the year, savings rates are likely to continue trending downwards in the months to come, and fixed rate deals above 4.5% may not be around for much longer.
“For savers, this means keeping an eye on your savings rate, and being prepared to switch. You need to keep your emergency fund in easy-access savings, which are likely to drop. However, some banks will be in more of a hurry to cut rates than others, so you could more than double the rate from a pedestrian high street giant by shopping around among online banks and savings platforms.
“For money you don’t need for longer, this is a decent opportunity to consider fixed rate savings. Fixed rate deals, which guarantee the rate for a specific period – from a couple of months to five years – will let you lock in a rate for the duration. These have come down from the peak, but you can still make around 4.5%, and as easy access deals get less generous, these deals will look increasingly attractive. It means anyone who has money they don’t need for a fixed period of a few months or longer should consider tying it up for a better rate.”