Nearly half (45%) of people with a financial concern for others plan to prioritise growing their cash savings over the next five years, according to a survey.
The findings, from financial adviser and wealth manager Quilter, were released after the Bank of England base rate increased from 3.5% to 4% on Thursday.
Interest rates on cash savings accounts have been rising as the base rate has been hiked, although cash savings rates will only partly offset the surge in living costs, with consumer prices index (CPI) inflation running at 10.5% in December.
Ditching and switching cash savings accounts to get better rates as rates rise could be worthwhile, to mitigate as much of the eroding impact of inflation on cash accounts as possible.
Quilter also found that nearly a third (32%) of people planned to prioritise paying down debts, such as mortgages and loans, in the next five years.
The way in which they are saving requires careful consideration
Andy Miller, Quilter
Nearly a quarter (22%) expected to make planning for retirement a priority.
A fifth (20%) planned to prioritise helping their family financially and the same proportion (20%) expected to grow their investments.
The research also found that 24% of people with financial concern for others had stopped saving in general, due to the rising cost of living, and 6% had stopped saving money for their children or grandchildren.
Andy Miller, lead investment director at Quilter, said: “It is good to see that growing savings is a priority for so many people, but the way in which they are saving requires careful consideration.
“Cash savings are certainly important to have to fall back on should you need it, but at a time of very high inflation they will be rapidly eroded in real terms.”
He said people looking to the longer-term may potentially have more chance of growing their money in investments rather than seeing their savings being depleted.
The value of investments can go down as well as up and people may end up with less money than they paid in.
Mr Miller added: “Seeking professional advice might also be sensible so that individuals can have an investment portfolio built for their needs.”
More than 2,100 people with a financial concern for others were questioned by YouGov in November 2022.
They were defined as having a financial concern for others if they had, for example, parents who were still alive, or children.
