Saving in the current economic environment remains tough, especially for younger savers. The cost of university education can be up to £9,000 per year in tuition fees, while rising house prices and slow wage growth make it harder to save for your first property. Combined with historically low interest rates, you may be asking yourself what the incentive is to save?
However it’s important remember, building up savings remains critical to future financial health – and just making day to day life easier!
According to research carried out by debt charity StepChange a staggering 13 million people in the UK lack the savings to keep up with essential bills for just one month if their income dropped by a quarter. 42% of those earning less than £15,000 do not have a month’s wages in their savings. If your in this position and incur an unexpected cost – for example needing getting your car fixed – you may need to borrow money, which can be expensive. The charity estimates that £1,000 in savings would protect 500,000 households from problem debt.
As a bank we recognise that there’s lots that we can do to help engage with people who are not already saving, while at the same time providing those who do, with a broader range of easily-understandable and accessible savings choices. Our online saving tool is used by over 250k customers who use it to help them save for everything from a new house to a rainy day fund.
Meanwhile Government schemes such as the Help to Buy: ISA (or the newly announced Help to Save and Lifetime ISA schemes) can help make savings go further. If you put away a little, often you’ll be surprised by how it stacks up.