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UK Savers’ Apathy Can Cause them to Miss the Best Deals

Personal_Finance / Savings Accounts Jun 13, 2017 - 03:27 PM GMT

By: MoneyFacts

Personal_Finance

Data from moneyfacts.co.uk can reveal that the savings market has shown some signs of improvement since the start of 2017, with the number of savings rate rises outweighing cuts for the fifth month running. In fact, rises outnumbered cuts by a third, as Moneyfacts recorded 95 rate rises in May versus 60 rate reductions.


Statistics released today show that the Consumer Prices Index (CPI) rose to 2.9% during May, so despite a boost to savings rates, not one of the 750 standard savings accounts on the market* can outpace inflation.

While rising inflation could well be a deterrent to those looking for a fair return on their cash despite the number of interest rate rises for cash savings, this apathy can cause them to miss out on the best deals if they are not quick enough in applying or fail to monitor the changing market online.

Rachel Springall, Finance Expert at moneyfacts.co.uk, said:

“While it’s positive to see a greater number of savings rate rises over the last month, this was largely thanks to the challenger banks and mutuals, which continue to prop up the market with the best deals. Inflation is becoming more of a threat and rates are still low compared to years gone by, which could be putting off savers looking to build a nest egg.

“Savers must not be deterred from searching for a good deal, however, as their apathy could mean missing out on much better returns. As an example, someone with £20,000 in a NatWest Instant Saver would earn just £2 over a year, but they could earn £222 if they held an easy access account with Charter Savings Bank paying 1.11% instead, which is currently the top deal.

“If savers do decide to chase down a more competitive deal, they shouldn’t wait around too long. A good example of this is the Ford Money regular saver paying 4%, which was withdrawn after just one day. Challenger banks can change their savings range much more quickly than other brands, which means savers will need to be fast in order to grab the highest rates. In many cases, if savers aren’t online, they could well be missing out on not just savings alerts, but also some of the best deals.

“Those who prefer to open their savings account on foot will find a distinct lack of interest in cash savings among the high street brands, which seem to be taking a vacation from the Best Buy tables. Similarly, those savers investing in Cash ISAs may well find better returns on non-ISAs – even if they pick the top ISA, they could be missing out on better savings interest away from the scheme.

“Even if interest rates stay low, not all hope is lost for savers, as there are still Government initiatives that can support those eligible, such as the Personal Savings Allowance (PSA), Help to Buy ISA and Lifetime ISA (LISA). Those saving for a deposit on their first home would be wise not to miss out on a 25% boost by using a Help to Buy ISA, and if the scheme ends before they have the chance to buy a home, they can move the funds into a LISA. Skipton BS launched the first ever Cash LISA last week, which will hopefully spur on other institutions to follow suit.”

*Data Note: Please note that these savings product numbers only include deals that are available to all UK residents (this figure does not count each interest payment option for each account). Moneyfacts has chosen not to include products that have limited access, such as locals-only, high net-worth clients or linked products which mean you must have an existing account to obtain headline rates. Moneyfacts has taken the view that as these accounts are not available to your entire readership, their inclusion may be misleading to your readers by directing them to accounts they may not be entitled to. We do, of course, hold all this data should you require it. Our daily Moneyfacts savings rate monitoring started in July 2015 and is a record of live standard savings account changes, which include fixed rate bonds of all terms, all ISAs, notice accounts and no notice accounts.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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