EASYMONEY, part of Sir Stelios Haji-Ioannou’s easy family of brands, has called for low-interest-rate ISAs and savings accounts to carry risk warnings.
The peer-to-peer property lender said on Saturday that savers need to be alerted to the threat of value being destroyed by inflation.
Investment products require extensive warnings to make it clear that capital is at risk, but there is no such requirement for cash ISAs or simple savings accounts, EasyMoney said.
Recent research compiled by the P2P platform found that UK savers lost £32.5bn to inflation last year as a result of low interest rates.
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Risk warnings would help people make better decisions about what kind of financial product is right for them, EasyMoney claims.
“People see cash savings as a ‘safe’ option, but one of the big risks for real returns is an excess of caution,” said Andrew de Candole, chief executive of EasyMoney.
“The reality is that the value of cash is being destroyed by inflation because it’s typically earning next to no interest in standard ISAs and traditional savings accounts.
“It’s imperative that savers with low interest bank accounts are made aware that their capital is at risk.
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“What consumers need is much more information and more choice in the marketplace than traditional banks or even so-called challenger brands are providing.”
“Everyday investors in the UK have gone almost a decade without real interest rates,” said Haji-Ioannou, founder of EasyJet and owner of the easy brand. “With the EasyMoney IFISA, we’re offering something new and taking on the big boys.”
EasyMoney acquired the business of specialist short-term property lender Tower Bridging and makes loans to property professionals secured by a first legal charge over UK property.