Understanding the income challenges facing investors today A difficult environment for income investors Low interest rates and several longer term factors make It is particularly important to remember that if the it hard to get an income from cash income you receive on your savings does not keep pace with the rising cost of living (ie the inflation rate), your If income doesn’t keep pace with inflation, your purchasing power will reduce over time. In other words, purchasing power falls over the years your money will buy you less of the same goods in the You may need to explore other investment options to future than it can today. achieve the income you need Taking all this into account, individuals are recognising The legacy of the global financial crisis has made life the need to put cash to work to generate a better level difficult for savers. Across much of the developed world, of income from alternative sources. policymakers, such as central bankers and politicians, In this guide, we outline some of these options for have looked to revive economies with historically low generating income. interest rates. This means keeping cash in the bank has generally paid very little reward. As such, drawing an Please remember that up to £75,000 of your money income from savings alone may no longer be sufficient is secure in a bank or building society through the for many people to maintain the lifestyle they expect. Financial Services Compensation Scheme, unlike stocks and shares or fixed interest investments which are less secure. 3