Saving boost for millions as global stock markets soar
MILLIONS of savers were given a huge boost yesterday as share prices soared.
The FTSE 100 index at one point hit 6,887, a level not seen since the dotcom boom. Since mid-December the value of Britain’s leading companies has risen by 11 per cent – around £175billion – driving up the value of pension pots and investment Isas after years of poor returns.
Eddie O’Gorman, of pensions specialist The WAY Group, said: “This is terrific news, especiallyfor those about to retire who have not bought an annuity – their pension funds will be worth more.”
The FTSE dropped back slightly later yesterday to close at 6,873.5.
But analysts say it could continue to rise towards the December 1999 record high of 6950.7. The surge is due to low interest rates, the improving global economy and the European Central Bank’s decision to pump more cash into ailing European economies through quantitative easing.
Stock markets around the world have been on an upward “bull” run for two months and the Dow Jones in the US, the Hang Seng in Hong Kong and European markets in Frankfurt, Paris and Madrid all finished up yesterday.
Chris Beauchamp, market analyst at the spreadbetting firm IG, said: “Record low interest rates around the world have meant that stock markets have become a natural destination for investors, while the steady return to health of so many economies, not least the US, has given a big boost to confidence.
“Investing in the stock market is essentially a play on the idea that things will get better – even with Greece and Ukraine in the news, that thesis still holds good.”
Pensions guru Dr Ros Altmann said: “Savers have had a really tough time and with interest rates so low many investors are desperate for income. UK shares offer higher dividends than most markets, so they are attractive now especially when other investments pay so much less.”
She added: “Pension funds will benefit from rising share prices and now that the Government has changed the rules so you aren’t forced to buy an annuity you can enjoy further gains in future rather than locking in at today’s ultra low interest rates.”
