2018’s Best Savings Accounts for Over 50s

The UK’s over-50s are considered by many to have been a lucky generation.

The demographic that sits between the age of 50 and 65 missed the post-war hardships of the generation before them but caught the property prices boom and a period of general economic prosperity.

They’ve also worked hard and built much of what we know as Britain today.

The over-50s are often, deservedly, beginning to cast an eye towards retirement and ramping up their savings efforts to provide for that.

With the mortgage hopefully paid off, or the end in sight, the period between turning 50 and retirement is the ideal time to really turbo-charge savings in a way that will make all of those long considered retirement plans financially practical.

With retirement starting to appear on the horizon, saving, and getting the best conditions possible for those savings, is crucial.

Compare the Top 10 Savings Rates for Over 50s

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Low Interest Rates are Bad News for the Over 50s

However, when it comes to good rates being offered by banks on cash savings, the over-50s are, unfortunately, not such a lucky generation.

Interest rates have been at record lows over the past few years. This makes it all the more important for the over-50s to put in the research and shop around to find the best savings account available to them.

Like Interest Rates, Specialist Over 50’s accounts Have Dried Up

Several years ago, the banking industry, quite possibly lured by the fact that around 80% of the nation’s wealth is held by the over-50s, was making a concerted effort to woo the demographic.

A host of specialist savings accounts that came with particularly attractive interest rates was exclusively available to the over-50s.

Nowadays, however, while specialised over-50s savings accounts do still exist, the terms they come with are not quite as attractive. In fact, many over 50’s feel ignored by finance brands, despite their wealth.

It is a sign of our low-interest rate times but the irony is that there are regular, non-specialist savings accounts open to everyone of any age that offer better conditions than many ‘over-50s’ accounts do.

The Best Rates Are Not on the High Street 

At present in 2017, it makes sense for the over-50s to think outside of the box if they really want to see their wealth grow over the next 10 years. The best rates available are from new, challenger banks or P2P providers.

It’s worth noting that some of these may contain a higher risk than non-specialist savings accounts.

The best interest rates available on cash savings tend to come with accounts that require savings to be locked up for 1 to 5 years in a bond, have high minimum deposits or oblige the holder to deposit a minimum amount into the account every month, year or quarter.

It’s worth noting that some of these may contain a higher risk than non-specialist savings accounts and can come with penalties on early withdrawals so do read the terms and conditions careful before depositing any lump sums.

These are riskier than the other products, but have good track records with their clients. For more sophisticated investors who are comfortable with risk.

Fixed Rate Bonds could be an option If you don’t need access to the money, but still need safety of FSCS.

The NS&I no longer offer ‘pensioner bonds‘ but they do have a 3 year account with a reasonable rate. Probably the safest place to deposit money out of any account in the UK.

  • NS&I 3 Year Guaranteed Growth Bond
    1.95% – Investment Guaranteed Growth Bond
    Covered by FSCS
    Minimum £500, Max £1m.
    Considered safest of all – lending to UK government itself (who have never defaulted on a debt).
    Please note: higher rates are available to existing customers with a maturing bond, and there are also income types available.

The Saga 1 year ISA, specially for over 50s is currently on a low 0.75%.

Best Instant Access and Regular Savings Accounts For Over 50s 

Here our focus is on regular ‘easy access’ savings accounts that don’t come with lock-in periods or particularly high minimum initial or regular deposits.

Ulster Bank currently offers one of the top interest rates for a regular savings account, at 1.25%.

With no Ulster Bank branches in mainland UK, it’s a Northern Ireland-only brand of the Royal Bank of Scotland Group, an account has to be opened online.

Identification documents may have to be verified by taking them in to a Royal Bank of Scotland or Nat West bank if they cannot be verified electronically but otherwise the process is straightforward.

The next best interest rate option for a savings account is with Kent Reliance at 1.15%. Opening an account does require an initial minimum deposit of £1000 but we’ve decided to include it in the list as it is not a particularly high threshold.

There are another three options that come in just behind these two though all are online only options.

Charter Savings Bank and Bank of Cyprus UK both offer interest rates of 1.11% while RCI Bank’s Freedom Savings Account is very marginally behind at 1.1%.

Bank of Cyprus just edges it due to the offer of an additional 0.51% introductory interest rate over the first 12 months of an account being opened.

The minimum opening balance is also just £1 while a savings account with Charter has a £1000 minimum initial deposit. The RCI account requires a £100 minimum deposit.

It should be noted that RCI is covered by the French financial regulator rather than the UK’s FCA.

Were the bank to become insolvent client funds of up to 100,000 euros would be protected, compared to the FCA’s £85,000 guarantee.

At present exchange rates 100,000 euros is actually £91,312. This means that in the worst-case scenario, the guarantee is actually superior than the equivalent for funds held with a UK bank. It will be interest to see if this is still the case in a post-brexit UK.

Please note: All savings rates listed are correct at the time of writing. 

John Adam

John Adam co-founded iNVEZZ.com, a news, analysis and comparison portal for retail investors. iNVEZZ was acquired by Investoo in 2017.