Savings Guide for UK Savings Week 2023 - Part 1
Happy UK Savings Week!
From the 18th – 24th September 2023 we are celebrating savings and encouraging good savings habits, but where is a good place to start and how do you know what is right for you?
In the last 12 months we have seen the Bank of England Base Rate increase to above 2% for the first time since December 2008. Without taking a deep dive into the past, this week is about encouraging good savings behaviours, education on what savings products are out there, understanding what type of savings products are the most suitable for you and how you can go about saving effectively while money is limited and every penny counts.
Saving from a Product Manager perspective
I’m Georgia and I am the Savings Product Manager here at Monmouthshire Building Society. Not only is savings products and the savings market all I look at for most of my working day, but personally, I have a passion for getting the most out of my money. I LOVE to spend money, (even if I don’t always have it) and have often found myself using the increasingly popular ‘girl math’ method to justify my spending. What if, rather than using some not-so-conventional methods to justify our spending, why not let our savings accounts do the hard work for us? We are living through a time where savings products are competitive and offering fair value to customers. So, let’s pull apart some sections of savings, so that you can understand what the most suitable products are for you.
What savings products are out there?
Typically, there are your Bonds, Cash ISAs, Regular Savers, and Instant Access accounts. More recently, we have seen Limited Access products appear in the market and these have proved to be very popular.
Different financial institutions can have other products on offer, essentially you need to understand what your needs and objectives are before committing to a savings product as sometimes there can be penalties for you needing your money back.
Some questions to ask yourself before looking at savings products could be:
- Will you require access to your money at any point in the near future?
- Do you want a fixed rate that doesn’t change or are you happy to accept a variable rate that could go up or down at any point?
- Do you have a lump sum to invest or are you looking to save little and often?
- Do you have any other savings accounts and are there any tax implications/benefits on the interest that you are earning?
- Have you had a Cash ISA this tax year?
Access to your money
Most fixed rate savings will come with fixed term agreements, you may see ‘1 Year Fixed Rate Cash ISA’ or a ‘6 Month Bond’ advertised. These usually mean that you are agreeing to give the bank or building society your money for that time period and not have access to it - if you do need access to it there will likely be a penalty or cost to you or sometimes access is not an option. Fixed term products are usually the best rates on the market, but this varies depending on your savings provider and market changes.
Limited Access products have become increasingly popular in the market, with the cost-of-living crisis and uncertainty within the market, as consumers we have been more cautious about being left short each month. Limited Access savings products usually offer a better rate than instant access, not as good as fixed term, but gives the option to have access to your money. The restrictions on these types of accounts can vary from set amounts to the number of times within a year that you access your money. It is important to note down or highlight what your restrictions are and keep track of them if you do operate within these restrictions.
Instant Access products are usually a lower rate than your limited access or fixed terms, however, are less restrictive. If you know that you want to start saving but you are completely uncertain about how often you will need to access your money, these are your safest option.
Only you will be able to know if you want or need access to your funds – some people need money locked away or they will spend it, some need to know that they can access it in case of emergencies. Everyone is different – which is why there are so many kinds of savings options on the market!
Future you will thank you for it!
Put nicely by UK Savings Week | 18th - 24th Sept 2023 ‘Having a pot of savings opens doors. Just think, you could maybe pay for a qualification that sets you on a new career path or say ‘YES!’ to a holiday of a lifetime, without going into debt.’
I hope this small snippet has been somewhat helpful, and this is only the first part of the puzzle with more to come soon.
If you would like to read the other guides in the series:
Savings Guide for UK Savings Week - Part 2
Savings Guide for UK Savings Week - Part 3
