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Most of us would like to save a bit more, but often saving can fall to the bottom of the priority list, especially when we’re juggling busy lives.
The good news is that there are several steps you may be about to take to build better savings habits, which in turn will provide you with greater financial security. Here, we explain what you need to know, including how savings marketplace Raisin UK can help you find the best savings accounts so your money works as hard as it possibly can for you.
1. Stop dipping into your savings
If you have savings held in an easy access account, it can be tempting to dip into them whenever you want to make an impulse buy. However, whilst it can be all too easy to take money out, it’s important to remember that it’s usually a lot harder to build your savings up again.
If you find it hard to resist dipping into your savings, you might want to consider putting some of your money into an account that restricts the number of withdrawals you can make, or doesn’t permit them at all during the account term. For example, with a fixed rate savings account, you usually can’t take any money out during the fixed rate term without incurring a penalty. If you’re not sure how long you should tie your money up for, you can learn more in our guide How long should I fix my savings for.
2. Locate any missing savings
If you’ve opened several savings accounts over the years, it can be easy to lose track of them, especially if you’ve moved home a number of times and have forgotten to notify all your providers of your change of address.
According to Raisin’s Great British Savings Report, an estimated 20m people across the UK have unclaimed money, equivalent to around £82 billion of lost savings. This includes 4.8 billion unclaimed pension pots worth an estimated £50 billion, as well as forgotten savings accounts, investments, and other financial products.
A spokesman for Raisin said: “These dormant assets underscore the importance of keeping track of all financial accounts and checking in on investments regularly to ensure they are actively working for you.”
If you can remember the name of the bank you had the account with, your first step should be to contact them directly. Most banks will want you to come into their local branch with some photo ID to get the process of tracking down your account rolling. If your bank isn’t able to help you, or you can’t remember the name of the bank you held your account with, all is not lost. The free-to-use service My Lost Account allows you to submit a single form to find out if you had an account with over 70 organisations, including all major highstreet banks, 43 building societies and National Savings & Investments.
3. Seek out the best returns
Making sure your savings are earning as much interest as possible will help you reach your savings goals sooner.
About 19% of those aged 55+ who were questioned for Raisin’s Great British Savings admitted to keeping their money in low-interest accounts, which means the purchasing power of their money will gradually be eroded by inflation. A Raisin spokesman said: “In fact, with an estimated £253 billion of money sitting in people’s bank and building society accounts paying no interest, many older savers in particular are seeing their hard-earned money slowly diminish over time. Moreover, a significant portion of this group (14%) also admits to not regularly reviewing their savings options, which can lead to missed opportunities for better returns.”
Top 5 Easy Access accounts
by Raisin UK
Interest (AER): 4.87%
Interest on £5,000:
+£247
Guarantee:
£85,000
Interest (AER): 4.67%
Interest on £5,000:
+£237
Guarantee:
£85,000
Interest (AER): 4.50%
Interest on £5,000:
+£228
Guarantee:
£85,000
Interest (AER): 4.46%
Interest on £5,000:
+£226
Guarantee:
£85,000
Interest (AER): 4.39%
Interest on £5,000:
+£223
Guarantee:
£85,000
There are several websites where you can search for the best savings rates, including Raisin UK, which enables you to choose from a wide selection of high interest-paying accounts from 40 banks and building societies including challenger banks and those not found on the high street. Learn more in our guide Where can I find the best savings rates?
4. Set your savings goals
Having a clear savings goal and idea of when you want to meet it can help make you more disciplined, as you’ll have a particular target to aim for.
For example, you might be saving £5,000 to make home improvements which you want to make in 2030. That means you’ll need to save around £83 a month every month to achieve this goal (not factoring in any interest you’ll earn).
Knowing exactly how much money you need to put away each month to meet your savings goals makes it easier to put away a set amount of money each month, as if you don’t, you won’t achieve your objective.
Get more for your money with Raisin UK
Raisin UK provides a free-to-use savings platform that allows savers to browse, open, and manage accounts with over 40 FSCS-protected banks and building societies.
Apply for savings accounts in just a few clicks, and they’ll handle the rest. Sit back, relax, and skip the paperwork as you watch your money grow.
5. Save regularly
If one of the reasons you don’t save as much as you’d like to is that you simply forget to pay into your savings regularly, it’s worth setting up a standing order from your current account into your savings.
This not only has the benefit that you don’t have to worry about paying money in manually, but because it’s done automatically it simply becomes part of your monthly outgoings. You can amend your standing order at any time if you want to contribute more or less each month.
6. Don’t restrict yourself to the names you know
It might be tempting just to stash your cash with the same bank you hold your current account with, or another high street banking name you know, but sticking with the familiar isn’t always the best idea. Despite this, traditional banks remain the most popular choice for savings accounts overall, according to the Great British Savings Report, with over one-third (37%) of us using them.
Those aged in their 50s and beyond in particular often prefer traditional banks and building societies, valuing the stability and familiarity they offer. However, it’s often challenger banks and newer providers which offer the best returns on savings, as they have to work harder to attract customers than some of their longer-standing rivals.
If you prefer to stick with familiar names because you think you’ll have greater financial protection, you’ll usually find you’ll have exactly the same protection from less well known providers. For example, all the banks that Raisin UK works with are protected by the Financial Services Compensation Scheme (FSCS), or the European equivalent scheme.
The FSCS is the UK’s financial compensation service that steps in when financial institutions fail and are unable to pay customers’ claims. Bear in mind that you will only be covered for £85,000 of savings held with a single institution, so check you don’t hold accounts with two different banks that are owned by the same institution which together exceed this limit.
Please note that this does not constitute financial advice, so always do your own research to ensure it’s right for your specific circumstances.
