Over 50s predict FTSE, base rate and inflation for the end of 2017

Posted On: 
28th December 2016

One in five over 50s correctly predicted where the FTSE 100 Index would be at end of 2016.

Around one in five over 50s correctly predicted the 2016 closing range for the FTSE 100*, this is twice as many as predicted the correct closing range last year, suggesting that they are becoming accustomed to the financial climate in the UK.

The Saga Money poll of over 11,600 over 50s suggests that some investors will be delighted with the performance of our Blue Chip companies this year as a third predicted the FTSE 100 would be performing worse than it currently is.

When it comes to the battle of the sexes men’s bullish outlook has held them in good stead this year as one in four correctly predicted where the FTSE 100 Index would sit by the end of 2016, compared to just 1 in 13 women.

A quarter of over 50s have a positive outlook for 2017 as they believe the overall value of Britain’s 100 biggest companies listed on the Stock Exchange will increase**.

However, on average, the Saga generations predict the FTSE 100 will be around 7,008 this time next year; with 1 in 25 thinking it will break 7,400 next year.  Only one in six think the FTSE will be lower by the end of 2017.

Men are more optimistic than women as they’re three times as likely as women to think the FTSE 100 will increase (36% and 12% respectively). 

When it comes to the Bank of England Base Rate, many over 50s have been sorely disappointed this year.  Along with many experts who thought things could not get any worse for the base rate, almost four in 10 over 50s predicted that the base rate would rise by the end of 2016.  For this group of people, many of whom are  dependent on their savings interest to boost their income the further decline in the base rate has come as a heavy blow.  That said, they are optimistic that we will see an increase by the end of 2017, typically thinking that the rate will rise to 0.75%.

When asked about inflation the majority of over 50s believe that we will see a further increase in 2017. On average, people believe the consumer price index will be around 2%, which could be a huge blow to those on a fixed income in retirement.

Sally Merritt, head of product, Saga Money, commented: “The decline in the base rate  has really affected those relying on their savings for income  this year, highlighting for many that they may be best off investing their money for the chance of a higher return. 

“We can see from our research that many over 50s are particularly savvy and keeping a close eye on the financial climate, which is key for people trying to make their money work hard for them throughout their retirement.”