Cash in before the crash

MANY savers will be happy to keep their money in cash at the moment, amid growing warnings that the stock market is in a bubble.

- By Harvey Jones

Bank of England (BoE) Governor Andrew Bailey is the latest to warn of a potential stock market crash, as the artificial intelligence boom risks careering out of control.

Savers who still remember the shocks of 2008 and 2020 hardly need reminding that crashes can wipe out years of careful investing, even if share prices do have a habit of recovering fairly quickly afterwards.

For many, particularly older savers, the instinct now is to hunker down in cash and watch from the sidelines.

That instinct makes sense, up to a point. Cash offers safety and certainty that shares can’t match, but it doesn’t offer complete protection.

New figures from Moneyfacts showed the average savings rate has dipped to 3.44%, which is below the August consumer price inflation figure of 3.8%. The result is that the average saver is losing money in real terms.