Savings accounts have been launched by Secure Trust Bank and savers have a choice of notice and fixed rate deals. These deals concern regular accounts and ISAs.
Families across the UK appear to be struggling with their savings engagement at the moment, as recent research from Hargreaves Lansdown showed many have no emergency savings at all to fall back on.
Hargreaves Lansdown surveyed 2,000 people in April, the results of which highlighted:
- 74 percent of people say they have an emergency savings safety net – 26 percent of people don’t.
- 53 percent of people say the past year has made them more aware of the need for emergency savings.
- Nine percent of people say they started emergency savings during the crisis, and 36 percent added to existing savings
- 12 percent of people don’t have savings but plan to start building them, while 14 percent have no savings and don’t plan to start saving.
- 38 percent have had an unexpected expense in the past 12 months. On average it cost them £1,420.
Sarah Coles, a personal finance analyst a Hargreaves Lansdown, reflected on these findings.
She warned: “Despite everything that has happened over the past year, one in seven people still don’t have any plans to build an emergency savings safety net.
“We have made some impressive strides forward. 2020 wasn’t a vintage year in many respects, but when it comes to emergency savings, it was outstanding.
“A dramatic cut in spending opportunities combined with a vital reminder of the value of having something to fall back on, meant we saved an average of £15billion a month in the year to the end of February. Three quarters of people say they now have an emergency savings safety net.
“However, this also means one in four people don’t, and more than half of this group have no intention of saving.
“Unfortunately, even if we’re past the worst of the crisis, there’s still every chance you’ll need this money to fall back on.
“The past year has shown just how easy it is to be blindsided by the unexpected, and for an income shortfall to come out of the blue. On top of that there’s always the risk that we face expenses we haven’t planned for. In the past year, on top of everything else, two in four people had at least one unexpected expense, costing an average of £1,420.
“People of working age should have three to six months’ worth of essential expenses in an easy access account for emergencies. Our calculations show that this means having at least £3,000 in savings for the average single person.
“During the pandemic, the inability to go out or go shopping helped enormous numbers of people free up cash without really trying, but now everything is opening up again, we may need to make more of an effort to cut back. One useful approach is to keep a spending diary to see where your cash is going, and decide what you can live without. This doesn’t have to mean great sacrifices, even shopping around for utilities can be a great way to save money.
“Leaving your cash in a current account or an easy access savings account with a high street giant means you’ll get next to nothing in interest, so once you have freed up the cash, set up a direct debit into a competitive easy access savings account, on payday, so you save the cash before you have a chance to spend it.”