UK’s Over-60s Urged to Withdraw Money and Secure Higher Returns

Amid the cost of living crisis, financial experts are urging over-60s in the UK to act fast and move their money. With many savings accounts offering low interest rates, retirees are advised to switch to higher-paying options

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Over-60s money withdraw
Over-60s money withdraw. credit : shutterstock | en.Econostrum.info - United Kingdom

As the UK grapples with an ongoing cost-of-living crisis, a fresh warning has been issued to millions of households over the age of 60. Financial experts are urging pensioners and retirees to take immediate action to safeguard their wealth, ensuring they don’t leave money on the table due to overlooked financial opportunities.

With inflation hitting households hard, many older Britons are struggling to keep their finances intact, particularly as savings rates remain low. However, there are still key strategies available for those who act swiftly. 

Among the most significant recommendations is moving cash from low-interest bank accounts to higher-yield savings options, including easy access accounts and fixed-rate ISAs.

Benefits and Mistakes to Avoid

According to financial analysts, one of the most common mistakes older people make is failing to claim all the benefits they are entitled to. 

Many over-60s are missing out on Pension Credit and the State Pension if they qualify, as well as other Department for Work and Pensions (DWP) benefits. These errors could leave thousands of pounds unclaimed, significantly impacting financial security during retirement.

Moreover, some retirees are withdrawing from their private pensions while still contributing, which can trigger the Money Purchase Annual Allowance (MPAA). 

This rule reduces their annual tax-free pension contribution limit from £60,000 to just £10,000, making it critical to understand the rules before making withdrawals. Experts suggest avoiding flexible withdrawals like UFPLS (Uncrystallised Funds Pension Lump Sum) or income drawdown strategies unless absolutely necessary.

Smart Money Moves: Savvy Saving Options for Over-60s

Financial advisors highlight the importance of reviewing interest rates, as many high street banks are offering under 1% on savings accounts. Savvy savers are being urged to consider moving their money into easy-access savings accounts that pay as much as 4.98%, or fixed-rate ISAs and bonds, which currently offer returns up to 4.58%.

Mark Hicks, head of savings at Hargreaves Lansdown, noted that with savings rates likely to decrease in the coming months, it’s crucial to act quickly to lock in better deals. While easy-access accounts are necessary for emergency funds, Hicks recommends that money not needed immediately should be placed in fixed-rate accounts to maximise returns.

These actions could provide financial stability for older households, enabling them to keep up with inflationary pressures while ensuring a more secure retirement. According to Funderer’s lead analyst, these are simple yet effective strategies that could significantly impact financial wellbeing and peace of mind for over-60s.

The advice comes at a time when many UK households are seeking ways to stretch their incomes amid rising living costs, with older people particularly vulnerable to financial strain. A combination of financial awareness and strategic savings could help many seniors maintain or even improve their financial situation in the coming months.

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