Britons are considering charities, supermarkets and even restaurant chains in the hunt for a good rate of return on their savings, a new study suggests. Researchers found that savers are prepared to switch from traditional financial products and services to the burgeoning ‘retail bond’ sector as interest rates continue to flat-line. The nationwide poll of 1,063 consumers by YouGov for Nuffield Health found that nearly half of Britons – 44% – would deem a national charity a trustworthy issuer of a retail bond and a safe place to put their savings.
Some 47% said they would trust a public sector organisation and 41% said they would trust a supermarket when investing in a retail bond.
A significant portion – 25% – said they would trust a restaurant chain when considering lending money via a retail bond and another 25% said they would trust a national energy company.
The figures are comparable to the 42% who said they would trust a bank when thinking about investing via a retail bond.
Nuffield Health, the country’s leading not-for-profit provider of health and wellbeing services, conducted the research as it launched its own retail bond to support investment in healthcare services in the UK. The charity is inviting people to apply for the Nuffield Health Bond in amounts of £1,000 to £250,000 in return for a fixed annual return of 6% (gross) in cash before June 18th.
YouGov also asked the survey group to imagine they each had £1,000 to invest or save. They were quizzed on what interest rate they would “realistically” hope to achieve after 12 months.
Only 3 in 10 (30%) said they would anticipate more than 4% annual interest on their savings and investments, while a quarter (23%) said they would expect no more than a below-inflation 2% return – representing a loss in real terms.
KP Doyle, Chief Financial Officer of Nuffield Health, said: ‘’Just as the credit crunch has caused businesses to look for innovative ways of funding their growth, so savers are considering novel ways of finding a safe home for their savings. This is proven by the YouGov research.’’
“Perhaps erosion in consumer trust in the banking sector following the financial crisis is an element in this and when you couple this with historically low interest rates, something of a perfect storm emerges.’’
‘’It seems only logical that if your customers like and trust your brand, placing their savings with you is a sensible next step. This has certainly been the case for the Nuffield Health bond, where a good cash return in a secure, stable and long established social enterprise is proving attractive to our stakeholders.’’
As published on http://www.nuffieldhealth.com/about-us/news/savers-turn-retailers-and-charities-interest-rates-stay-rock-bottom