Learn to be a Financial Hunter - Not the Hunted
|
|
|
|
|
|
|
You Are Here: Home > Personal Finance > Banking & Saving > 5 min guides > Over 60s savings
Last update : November 2013
5 Minute Guides To:

Over 60's savings account

An Over 60s savings account is any style of savings account designed for those over a certain age. Most of them are for the over 60s although there are also some accounts designed for the over 50s and the over 65s.

It is therefore possible to have specifically designated Cash ISAs, Instant Access accounts and Notice accounts, which can only be bought by people aged over 60.

SCAM ALERT

  • One of the most read pages on this site is on investment scams

  • With interest rates at such low levels, and savers starting to suffer, it's a very fertile environment for the scammers who try to tempt people with yields of 10%-20% via 'alternative investments'

  • Invest with these cold calling firms and you will lose ALL your money

  • There's a new term called 'financial grooming' - please understand how it works and don't be a victim (see article below)

  • I can only help BEFORE you invest, if you invest then I can guarantee you'll lose everything

  • Here's the article

Say NO to -

  • All Cold callers

  • Grandly named companies located in impressive offices or areas (Mayfair, The Gherkin, Knightsbridge etc) offering yields of 10% - 30% a year

  • All firms that aren't regulated by the FSA. Make sure you call the firm in question from the telephone number on the FSA's website, many scam companies try to pass themselves off as legit firms

  • All firms that sell 'alternative investments' -
  • Carbon Credits
  • Fine Wine
  • Plots of land that will 'soon' get planning permission
  • Plots of land in sunny climates (Brazil if the big one right now)
  • Coconut plantations
  • Palm Oil plantations
  • African farm land
  • UK Burial plots
  • Rare Earth Metals
  • Anything where the yield is 10%+ and made to sound like it's easy (often they'll say it's guaranteed), and
  • Anything that's hard to get good information on yet easy to build a story - Rare Earth Metals and swamp land in Brazil masquerading as quality development potential are two good examples
  • If you're unsure of anything please feel free to email me, Alex Green

  • I can only help BEFORE you invest

  • DON'T LET THE SCAMMERS FINANCIALLY GROOM YOU

  • If you want to do you bit please try to educate the over 50s, the scammers love to target that group
Advantages
  • Higher interest rate - this is obviously the main advantage. It's possible to find an Over 60s account paying at least 0.5% higher than the best paying account open to all savers

  • Monthly interest - Often the best paying universal savings accounts only have a yearly interest option, so although interest accrues every day it's only paid once per year. However most Over 60s accounts will pay interest monthly which is obviously helps with budgeting

  • Interest rate more stable - The banks and building societies often love to move (up and down) the interest rate on their savings account without rhyme or reason. Usually the interest rate is more stable with the Over 60 style accounts

  • Simple products - When it comes to Personal Finance the simple products are normally the best as the banks can't hide any potential disadvantages in the smallprint - See secret number 3 - Buy simple and flexible which is one of this site's 10 Secrets to Good Personal Finance

  • Money is guaranteed up to 85,000 - The government guarantees all savings within a banking group up to £85,000

  • Internet banking - Most of these accounts come with internet banking and that's a great way to efficiently manage your money and financial commitments. Personally I love internet banking. See - 3 easy steps to safer internet banking
  • See also secret number 4 - The internet - 4 reasons why it's your financial friend which is one of this site's 10 Secrets to Good Personal Finance
  • Disadvantages
    • Marketing tricks - Sadly, some banks and building societies have Over 60s accounts where the rate of interest is lower than on some of their other accounts. To me this is plain wrong and it's a blatant attempt to trick the elderly, some of whom might be too trusting of financial institutions in this cut-throat age. See secret number 2 - Do your own research - it won't take long which is one of this site's 10 Secrets to Good Personal Finance

    • Savings can get split up between a few banks - In the old days most savers kept their money with the one bank. But now with competition so fierce for our cash it's possible to have 5 or more different savings accounts. This can get messy (paperwork etc) unless you get and stay financially organised

    • Lack of choice - The majority of banks don't offer Over 60s accounts and only a limited number of Building Societies
    Where to buy
    The Building Societies offer the majority of Over 60s accounts and in my experience the best deals are normally found with the smaller ones.

    At any one time there are probably about 25 Over 60s accounts on the market, the trick as ever is to sort through the dross to find good deals. So to find the best use-

    How to buy

    Most accounts can be opened either online, via the phone or in branch. This means it's possible for someone living in the Midlands to easily open an account with a Building Society completely out of their area.

    Overall the account opening procedure is normally simple although you might be required to send some ID to the bank or building society in question. They will usually ask for a photocopy of your passport/Driving licence as well as a recent utility bill or bank statement to prove your present address (note, mobile phone bills are normally not accepted).

    Buying tactics
    Don't just look at the interest rate - Combine this with flexibility

    Many think the higher the interest rate the better the account. However, flexibility should also come into the equation.

    For example, most of the older generation don't like to lock their money up for too long. So an account that pays 6% interest but requires 180 days notice to withdraw cash is not as good as an account that pays 5% but is instant access.

    Watch out for marketing gimmick accounts

    The Over 60s often have relatively large amounts of cash because they think it is safer than most other investments. And of course this hasn't gone unnoticed by the banks and building societies.

    So it is important to watch out for Over 60s accounts that pay a lower rate of interest than some of the other savings accounts.

    I call these types of accounts - marketing gimmicks - and all savvy savers should be on the lookout for them.

    Make sure you don't pay unnecessary tax
    Paying unnecessary tax on savings is a common problem especially among the older generation. In fact I once heard a statistic that up to 6 million non-tax payers are wasting an average of £53 a year by paying unnecessary tax on their savings.

    The taxman will automatically take 20% of the interest from a savings account unless the person isn't liable to tax, and many pensioners aren't.

    So to get interest paid gross instead of net you'll have to notify your bank by sending them the Inland Revenue's R85 form. More details on this link.

    LearnMoney.co.uk comment:
    When I look at Over 60s savings accounts I see both the best and worst of how the banks and building societies operate -
    • The best - a few of these accounts are excellent and offer unbeatable rates of interest combined with plenty of flexibility, so money can be withdrawn easily with little or no restrictions
    • The worst - many of the accounts can easily be beaten by other non-Over 60s accounts and seem to be designed to take advantage of the older generation, ie trick them into a lower interest rate

    But think positive, because if you recognise the above it's easy to make sure your hard-earned savings receive the best interest rate combined with the most flexibility.

    PS. Don't forget that every Monday we publish our Top 3 Savings Accounts which includes the best of -


    FREE Equity Release Guide

    • This LearnMoney guide offers a simple 5 Step process outlining exactly how to properly research the Equity Release market

    • It make sure you ask the right questions and get proper answers

    • Concentrates on the all-important costs and flexibility of the different Equity Release schemes

    • More details and to download your FREE copy

    Looking for something? Then search this site:

    © 2014 LearnMoney.co.uk All rights reserved

    The information on the LearnMoney.co.uk website has been compiled from sources believed to be reliable, but is not warranted to be accurate or complete.
    All recommendations and comments are provided for general interest only and should not be construed as advice.
    Professional advice should always be sought before buying or investing in any financial product.
    The price of securities and any income from them can go down as well as up.
    Past performance of a security or market is not necessarily indicative of future trends.
    Any opinions and recommendations on LearnMoney.co.uk are given in good faith, but without legal responsibility and are subject to change without notice
    .