United Kingdom  

Why do banks favour over 50s?

teletext Saturday, 28 March 2020
Like any business, banks and building societies want to appeal to their most profitable customers, which in many cases are those who are aged over 50, savings expert Peter Gerrard says.

"These customers often have a higher amount of savings, which they are likely to rely on to fund either a monthly income or retirement fund.

"So they are more commercially aware and seek the best possible return."

Banks and building societies need to react to this by offering the best rates possible, Peter Gerrard says.

"Rightly or wrongly they will reserve some of their better savings rates for the over 50s."

Controlling the number of eligible applicants for an account allows the banks to increase profitability, savings expert Peter Gerrard says.

"It ensures only those customers who have larger amounts to invest and are looking for a longer-term investment will apply.

"By encouraging investments from an age group who have more money to invest, the banks are able to build up credit."

As this age group is likely to invest on a long-term basis the banks and building societies can use the funds to lend to others, Peter Gerrard says.

"This keeps interest rates on loans, mortgages and cards lower and eases the availability of credit - something banks have struggled with recently.

"It is this paralysis in lending that has meant public money has been needed to keep the banking system afloat."

Encouraging savers, particularly those with higher amounts to invest, to return to banks will help accelerate the much-needed economic recovery, expert Peter Gerrard says.

"However, don't always assume that the accounts offering specific rates for over 50s will be the best.

"Many times this can be a gimmick or will involve tying money up for a long period of time."

Peter Gerrard says very often you can find a better rate offered with another organisation that doesn't restrict applications for the account on age.

"Additionally if you're comfortable with conducting your accounts either online or over the phone, better interest rates can be achieved than traditional passbook savings accounts."

*Peter Gerrard is a savings expert from** comparison website Moneyextra.com.*
0
shares
ShareTweetSavePostSend
 
Video credit: HT Digital Content - Published
News video: RBI cuts repo rate by 75 bps, allows 3-month moratorium on EMIs

RBI cuts repo rate by 75 bps, allows 3-month moratorium on EMIs 02:29

RBI Governor Shaktikanta Das announced the reduction of repo rate amid COVID-19 pandemic. During a press conference in Mumbai, Das said, β€œThe Monetary Police voted to reduce repo rate by 75 basis points to 4.4 per cent. The reverse repo-rate was reduced by 90 basis points to four per cent.” RBI...

Related videos from verified sources

Outer Banks Season 1 [Video]

Outer Banks Season 1

Outer Banks Season 1 trailer Plot synopsis: Four friends. One summer. And $400 million in gold... OUTER BANKS is a coming of age story that follows a tight-knit group of local teens (aka the Pogues)..

Credit: Teaser Trailer     Duration: 02:39Published
Food banks in Northeast Ohio are seeing a huge demand, as many people out of work are no longer able to provide their families w [Video]

Food banks in Northeast Ohio are seeing a huge demand, as many people out of work are no longer able to provide their families w

Food banks in Northeast Ohio are seeing a huge demand, as many people out of work are no longer able to provide their families with basic necessities

Credit: WEWS NewsChannel5     Duration: 02:34Published

Related news from verified sources

Canada banks split trading operations to ward against coronavirus disruptions

Canada's biggest banks said on Monday they are moving some traders to alternate locations, joining global banks splitting up operations to reduce disruptions due...
Reuters Also reported by •Belfast Telegraph

Manchester United and Man City donate combined Β£100,000 to help food banks during coronavirus pandemic

Manchester United and Man City have joined forces to donated a combined Β£100,000 to help food banks in the region. They may be rivals on the pitch but continue...
talkSPORT

You Might Like


Tweets about this