A portal that helps professionals, individuals and companies enhance returns on savings is now increasing Farmer's cash returns and providing them with increased deposit protection.
Recent figures released by the Government in the Farm Business Survey show the average net worth of farms sits between £1.14 million for spare and part-time farms to £3.85 million for very large farms, largely driven by land values and other assets.
As cash balances continue to increase as Brexit uncertainty leads British farmers to stockpile more cash, Cascade Cash Management asks the question ‘Are farmers getting the most out of their cash?’.
Cascade Cash Management is an independent and transparent professional cash management service created to generate enhanced cash returns and increased protection on deposits.
The service’s online portal is the only one of its kind in the UK allowing independent and unbiased cash solutions meaning that clients don’t have to choose only one bank. With the online portal and Cascade’s on-hand client support team, all banks are accessed quickly and easily, on a daily basis.
Managing director, Dr Emma Black, said: “Some assets are difficult or costly to convert to cash quickly and so many advisers use the liquidity ratio as a measure used for assessing the short term financial viability of farms. The data released reports that the average total current assets (i.e. cash, savings or stock) to average current liabilities (i.e. debt obligations) of farms is 224%, indicating that the majority of farms continue to hold strong cash buffers to meet their short term financial obligations.
“Our experience tells us that most British farmers are banking with one of the top four’s agriculture divisions, namely HSBC UK, Barclays Bank, Lloyds Bank and RBS. Cash tends to be held in a core current account with some linked savings accounts offered. Rates on these accounts tend to be low. On the average cash balance of £500,000, British farmers could expect to earn 0.00% on current account balances and up to only 0.45% with their existing provider subject to earning a loyalty rate (equating up to £2,250 annually) or 0.20% with a new provider (equating up to £1,000 annually).”
In contrast, the best rates available to Farmers in the market are much higher when looking outside of the top four and these can all be access through the Cascade Cash portal. On Instant Access, rates in the top quartile range from 0.45% to 1.50%, up to £6,500 more per year than remaining with the top four. Over a 10-year period, making the most of your cash could earn British farmers up to an extra £65,000 on Instant Access alone. For those that can spread cash deposits across different maturities, rates step up to 1.50% on 90-day notice periods and 1.86% on 1-year fixed terms.”
While earning better returns is a primary motivation to switching savings accounts, depositor protection guarantee schemes also allow for cash to be placed on separate banking licences to achieve full compensation should the provider fail. The current limit is £85,000 per banking licence so by placing for example a £500,000 cash holding across 6 different banks and building societies, British farmers could fully protect their capital in the event that any one provider fail.
Increasing cash returns while reducing risk makes professional cash management a key priority for 2018 for those in agriculture. The Cascade team can administer funds on behalf of clients and savers are provided with direct access to the online portal to view all of their accounts in one place. Partners including IFA’s, solicitors, attorneys, accountants and many more can also self-brand the product for presentation to their own clients.
