Secret accounts for senior savers!

Some of the best savings rates come from specialist accounts aimed at the over-50s.

After the Second World War ended in 1945, the UK, US and Europe experienced a baby boom as birth rates soared. This generation born between 1946 and 1964 came to be known as the 'baby boomers'.

Since 2006, the first British baby boomers have hit 60 and begun to retire in large numbers. With such a large group retiring en masse, this places an increasing strain on the UK's creaking pensions and benefits systems.

Today, Britain's over-50s own around four-fifths (80%) of all personal wealth and have benefited hugely from house prices soaring since the Seventies. They are likely to be the last generation to enjoy guaranteed, final-salary pensions.

Super savers

In recent years, these baby boomers have been criticised for being the greedy 'Golden Generation'. However, I believe that there is much to admire about this post-war cohort. They coped with post-war deprivation and rationing, studied and worked hard for much of their lives, and saved like champions!

Perhaps I'm a little biased, because my parents are baby boomers. They both worked from the age of 15 until retiring fairly recently. They have always lived frugally and well within their means, enabling them to save hard for those rainy days.

As a result, my folks have built up sizeable cash sums and, therefore, are constantly on the lookout for top savings rates. That's been easier said than done of late.

Accounts for older savers

One way for my parents and other senior savers to raise their rates is by shopping around for specialist savings accounts aimed solely at the over-50s. To entice well-off baby boomers to save with them, various building societies offer enhanced rates to senior savers.

I asked the money wizards at Moneyfacts for a list of all accounts aimed at the over-50s. This revealed a total of 43 different variable-rate accounts in this category, offered by 22 different providers.

Interestingly, almost all of these providers were building societies, with the notable exception of SAGA, a society catering exclusively to the over-50s. Oddly, there were no big banks in this list.

One thing that immediately stood out is that many of these accounts are firmly aimed at well-heeled savers. Indeed, eight of these accounts required a minimum deposit of £5,000, with 16 taking deposits of up to £1 million.

A dozen awful accounts

Now for the bad news: several of these over-50s accounts were pretty grim. In fact, I'd argue they were Don't Buys, instead of Best Buys. Here are 12 accounts aimed at older savers that pay 1% a year or less (before tax) on a balance of £5,000:

Frankly, these 'dirty dozen' savings accounts pay dreadful rates.

Best Buy over-50s accounts

We've got rid of the rest, so now let's turn to the best. These are the four table-topping variable-rate accounts solely for senior savers:

As you can see, these four accounts pay between 2.3% and 2.76% a year before tax on balances upwards of £1 (£1,000 at West Brom BS and Saffron BS). That's vastly more interest than the 'dirty dozen' accounts listed in my first table.

Best buys for all

Then again, senior savers should never restrict themselves only to looking among over-50s accounts. The best way to secure the highest savings rates is to check the whole savings market. For example, I found these market-beating rates for balances of £5,000 or more from easy-access accounts:

These four accounts offer easy access to your cash, plus table-topping rates ranging from 3.01% to 3.15% a year before tax. Three require a minimum deposit of £1, while the Principality BS e-SAVER Issue 5 requires a deposit of at least £1,000.

Please note that all four accounts include one-year introductory bonuses, ranging from 1.15% to 2.49%. When these bonuses expire, these four accounts tumble out of the best buy tables, so don't keep your cash in them beyond 12 months.

Senior savers have exclusive access to certain accounts, but many of these accounts are awful. Make sure you search the entire market to find the best savings rates!

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