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'Cash more attractive than stocks'

By Sarah Engle, Mon 8 Sep 2008 - Published in Banking

Savers should consider holding more of their money is cash rather than the stock market, due to the current economic climate, it has been claimed.

Darren Cook, head of press and PR at comparison website Moneyfacts, said lenders could be offering good rates over interest in order to balance out the lending side of their accounts, which can be attractive to savers.

He commented: "When there are uncertain times in the economic climate investors will tend to favour the near cash side of things, with fixed interest rates [on their savings accounts] until the uncertainty fades away."

Research from Lloyds TSB reveals that the past six months have seen 28 per cent of stock market investors move their funds into more cautious products such as cash or bonds.

The average amount they reported to have tied up in equities over the same period has fallen from £51,000 to £23,000.

In addition, 53 per cent of investors said they are apprehensive over stock market conditions for the next 12 months.