Saving for Retirement - Options Open up Again

ST PETER PORT, Guernsey, April 16, 2012 /PRNewswire/ --

Ask those who are approaching or who have reached retirement age today whether saving for retirement was their biggest financial worry and the chances are, after three years of record low UK Base Rates and frequent bad news stories on pensions, a majority will admit to more than a passing concern. For many people, there is no longer the broad confidence in the pension system that existed previously. Now, this whole area is seen as a major concern with many pension funds experiencing shortfalls following a poor period of stock market performance, accentuated by company pension underfunding.  Higher rates and runaway costs in areas such as energy and local taxation need to be budgeted for and are adding to the monthly burden considerably.

Those saving for retirement need help to boost their income and many require a degree of certainty in their planning as well.  This is where fixed rate deposit products can come into their own as well as those products which provide a monthly income.  While traditionally, they may not be the most 'exciting' of products compared to the adrenaline rush of watching the stock market, they are an important part of an investor's portfolio, especially if the appetite for risk is medium to low.

Jim Coupe, managing director Skipton International comments: "Knowing that many of our customers are worried about retirement income, we looked hard at our savings range and came up with some new products and options to help keep them on track.  We responded in two important ways.  Firstly, we have just launched two fixed rate products, our 1 and 2 year International Reserve Bonds. Secondly, we ensured both these and our range of variable rate deposit accounts all offered monthly interest facilities. Customers investing in fixed rate accounts can now receive a regular income each month. All our variable rate accounts can be used to help boost income too, as they offer both monthly and annual interest, making this an appealing option for retired customers."  

This month Skipton International is offering 3.50% gross/AER on its 2 year International Reserve Bond with a monthly gross interest option of 3.30% and 3.00% gross/AER on its 1 Year International Reserve Bond, with a monthly gross interest option of 2.80%.  

Jim adds, "Some savers do not consider fixed rate savings products because they expect interest to be only accessible when the account matures.  This means that if they opted for a two year account, they have to wait for two years to reap the rewards.  However, with fixed rate products such as our range of competitive International Reserve Bonds, customers can get a degree of flexibility as they pay interest annually and monthly, giving them access to income on their investment."

Savers opting for the greater flexibility offered by notice accounts can earn up to 2.75% gross/AER or up to 2.50% gross monthly with Skipton's International Select 180 account. This variable rate notice account is a popular choice amongst those looking for a blend of attractive returns with the option of access to capital, should the need arise.

Jim Coupe ends, "Customers who use savings accounts as part of a retirement planning portfolio have had to struggle against the effects of generally low interest rates, which have often meant a real cut in disposable income.  With these options and products, Skipton International is taking tangible steps to try to redress that balance by offering real options for retirement income which will protect the value of capital and offer a reliable level of income."

Editor's notes:

1. AER stands for Annual Equivalent Rate and illustrates what the rate would be if interest was paid and added each year.

2. Skipton International Limited (SIL) is a wholly owned subsidiary of Skipton Building Society (SBS), the UK's 4^th largest building society with nearly £14 billion assets.

3. SIL is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 1994, as amended.

4. Skipton Building Society has given an undertaking agreeing to discharge the liabilities of SIL in so far as SIL is unable to discharge them out of its own assets and whilst SIL remains a subsidiary of Skipton Building Society.

5. As a Licensed Bank in Guernsey, Skipton International Limited is a participant in the Guernsey Banking Deposit Compensation Scheme (the "Scheme") established by The Banking Deposit Compensation Scheme (Bailiwick of Guernsey) Ordinance, 2008 (the "Ordinance"). The following is a brief summary of the Scheme, but is not intended as a substitute for the actual wording of the Ordinance, a copy of which is available on request.

- The Scheme only applies to 'qualifying deposits', which broadly means deposits made by natural persons for their own benefit; with a few limited exceptions such as, for example, deposits made by trustees of retirement annuity trust schemes, the Scheme does not apply to companies, trusts, partnerships or charities.

- The Scheme will provide compensation in the event that a Licensed Bank is unable to repay its depositors. Under normal circumstances, payment will be made within 3 months of receipt of a valid claim form.

- Compensation is limited to a maximum of £50,000 per individual claimant; in the case of a joint account each depositor would be entitled.

- Total Scheme compensation in any five year period is limited to £100 million. If claims exceed this cap, compensation would be reduced pro rata. The cap also means that compensation in respect of any one bank cannot exceed £100 million.

- The amount payable may be reduced if the Bank has any contractual right of set-off against the account. The Scheme is entitled to recover compensation from any funds subsequently paid out by the Bank.

- Further information and a leaflet about the Scheme is available at:

Website: http://www.dcs.gg 
Telephone: +44 (0)1481-722756
Post: P.O. Box 380, St Peter Port, GY1 3FY

6. Deposits made with SIL are not covered by the Financial Services Compensation Scheme established under the UK Financial Services and Markets Act 2000.

7. Copies of the latest SIL audited accounts are available on request.

For more information on Skipton International savings products, visit http://www.skiptoninternational.com or call +44 (0) 1481 727374

Media contacts: Please contact:
Guy Stephenson/Jennifer Duffy
Nacelle Limited
Tel: +44(0)20-8333-9125
+44(0)7980-241-558
E-mail: jenny@nacelle.co.uk