Cassandra Lim, 66, says baby boomers need to read more finance information to educate themselves about savings opportunities. Picture: Rohan Kelly

New research has found that almost a third of boomers do not make the most of their savings, including a large group of people who earn virtually zero interest on their savings by using the wrong accounts.

As longer lifespans mean that Australians need to make their savings last longer, financial experts say there are ways to earn more interest income, even amid today’s low interest rate environment.

Twenty-seven per cent of baby boomers are leaving their savings in transaction accounts, which pay almost zero interest, while 21 per cent do not know the interest rate they are paid, RaboDirect’s Financial Health Barometer says. They make less of their savings opportunities than Generation Y, it says.

“It’s quite possible they will be around for another 20, 30 or 40 years so it’s certainly worth making the most of every dollar saved during their working life,” RaboDirect head of research and analytics Glenn Wealands said.

“Simple tactics such as swapping from a transaction account to an account that earns a high interest rate can make all the difference.”

Mr Wealands said RaboDirect calculated that Australians were missing out on $2.3 billion of extra income by leaving money in low-interest accounts.

He said many baby boomers were less aware of savings opportunities because they did not talk about money with family and friends as much as younger generations.

Yellow Brick Road executive chairman Mark Bouris said many savers were too worried about security to look beyond the big banks, despite other products being safe for their money.

“They’re scared and banks run campaigns to scare people,” he said. “These are the people most vulnerable because they’re easily scared and get poor returns.

“The banks make lots of money on this lazy cash.

“It’s about making sure your money lasts longer. We are all living longer, and what the financial services sector is not doing is making sure we live longer and live with quality.”

Mr Bouris said many people did not realise there was a new breed of savings funds that invested people’s money in term deposits but used their buying power to secure higher interest rates. “Traditional banks don’t have them because they don’t need them,” he said.

Retired nurse Cassandra Lim, 66, said new banking technologies made many older Australians uneasy.

“Many of my friends are good with technology, but I’m not really one of them. Overall, I think the lack of confidence or heightened fear and suspicion of technology makes it rather intimidating for some people,” she said.

“We need to read more about finances in order to educate ourselves more. The fear of making the wrong move stops us from going forward.”