The rising confidence of savers in saving products in current scenario.
“Forget about the fast lane. If you really want to fly, harness your power to your passion. Honour your calling. Everybody has one. Trust your heart, and success will come to you.” ― Oprah Winfrey
Confidence among savers in saving products has shifted in recent times because of factors such as the pandemic, which made many households rethink their mindset toward saving. The Covid-19 pandemic brought up significant changes in individuals’ saving habits; many families saved more than before the pandemic, with instant access accounts having had the most significant increase in savings. However, the effect of the pandemic has not been the same for every household; some have been heavily reliant on their savings to cover the cost of living.
Furthermore, homes where individuals have lower wages, are more likely to have noticed a decline in take-home pay and an increase in extra costs during the lockdowns and turned to savings to help them through the financial hardships.
On the other hand, some households have saved more money because of less money being spent on expenditures. However, it can be seen across numerous households that the pandemic has caused a lot of people to have a different approach towards saving.
The Bank of England has increased the interest rates various times in 2022. According to the Telegraph, with three rises in four months, the latest increase was from 0.75 to 1%. The increase in interest rates is an incentive to encourage savers to want to save as their savings go further.
Higher energy bills have also influenced people’s attitudes towards saving as people are trying to figure out ways of saving money on their energy bills. This is because energy bills have increased by almost 700 pounds for electricity and gas this year compared to previous years. In fact, according to ONS, 66% of those in Britain revealed that they had noticed an increase in their cost of living in recent months, with rising energy prices contributing to their struggle to maintain financial stability. This can also drive them to want to save more money in saving accounts in case they cannot cover the additional costs due to the increase in energy bills.
From past few years, savers with traditional saving accounts were not very enthusiast about saving because of the low rates saving accounts tend to have, and the majority will have noticed that their wealth has been weakened by inflation in the past years, however with the rising interest rates, the motivation of savers have definitely increased as they can’t control the inflated prices of goods however they have opportunity of earning slightly more interest on whatsoever savings they can afford to do. It’s a good sign for all those savers who tend to put aside some money from their income religiously every month for their savings goals or rainy days.
Whilst the interest on savings might not match the level of inflated expense that an average household has to spend for day-to-day life but it’s still a promising change that any saver could wish for!
The benefits of having Savings accounts
Almost every bank and financial institute offer savings accounts that pay interest, though features vary. In addition, there are usually no restrictions on the amount that can be saved into an account each year. The more money you deposit, the more it works for you to receive a higher interest rate.
If you have an ISA in which you have exhausted the saving allowance, a saving account can come in handy to save any additional money you may want to put aside.
Seven simple steps to becoming a confident saver:
Open a Savings Account
Before opening a savings account, make sure that you choose an account that matches your needs the best, such as an easy access account if you need to access the account regularly. And decide how much you would like to put aside each month.
Open a savings account and set a monthly transfer from your current account to your saving account.
Save First, Spend Later
Once your money has reached your savings account, you can focus on your spending strategy afterwards because if you save first and spend what you have left after saving and paying for bills, you will increase your chances of being able to be consistent with savings.
Save for multiple goals if you can do so
If you can save for multiple goals, then you could have a savings account for each purpose, for instance, one for a holiday and another for a rainy day and work towards achieving each goal
Try to be consistent with savings
Try to set some money aside every month even if you cannot save as much as the other months and have to adjust the amount you usually save to a lower amount. Do just that; save what you can!
Avoid accessing your savings account
If you can leave your savings to grow, then do this for as long as possible so that your savings can do more for you once you need to access them
Encourage your children to save
If you have children, it would be a good idea to start gradually introducing them to the world of saving as the younger children are when they learn about the importance of savings, the more likely they are to instil that in their lives when they are older and independent
Find ways of savings on energy bills
Some of the current advice on saving money on energy bills include turning the thermoset down by one degree, having 4-minute showers and replacing baths with showers, switching lights off more regularly, and doing one less machine wash per week.
The big energy firms also have hardship funds for those having difficulty paying their energy bills.
IntelliSaving and its role in your savings journey!
IntelliSaving is an intelligent savings account platform and application that was designed with savers in mind. IntelliSaving wanted to create a platform that would make it easier for savers to manage multiple savings and interest-bearing accounts, which is precisely what they have done. IntelliSaving has made integration easy as a few clicks of a button and aggregates both open and non-opening banking supported savings accounts. There is an array of features, such as the personalised portfolio where you can view a breakdown of your balances, cash deposits and withdrawals.
IntelliSaving also has a comparison feature for those wanting to compare different saving accounts in the market.
The website is also updated regularly with the changing interest rates and has articles on Money Saving Tips such as What is Inflation? And its impact on your Savings?
Savers having confidence in saving products can be influenced by various factors such as interest rates; for instance, if interest rates are low, this can discourage savers from having confidence that saving money will increase their money pot; however, if interest rates are high savers can be more inclined to save to grow their money. Other factors that impact saver’s attitudes toward saving, as mentioned earlier, are unexpected challenges arising, such as Covid-19, which changed household’s behaviour towards saving as some felt more encouraged to save even after the lockdowns had finished as they saw how their savings had increased. In contrast, others who could not save and had to dig into savings may also have more desire to save because they have been able to see how volatile life can be. The sharp increase in energy bills can increase the desire to save.
One thing that the last years have shown the world is how unpredictable it can be and how the unexpected can happen in a blink of an eye; its times like this that we can see how valuable a financial cushion having, such as savings, is to navigate through the economic challenges that unforeseen can present. Therefore, save what you can, and your savings could see you through the financial storm.