Say goodbye to buy now, pay later – get saving!
The days of ‘buy now, pay later’ are pretty much over. We can’t be so sure about how safe our incomes are, so saving for holidays, Christmas and emergency purchases is the best way forward.
Here are some Dos and Don’ts for making the most of your savings:
Shop around. It’s been years since savings accounts offered really generous interest for banking with them. Recent interest rates (as of June 2020) across most types of savings accounts stand at just above 1%. There are different types of savings accounts – if you want to be able to withdraw your money quickly you should have a look at easy-access accounts. You can get a slightly higher interest rate on ‘notice accounts’ but you won’t be able to access your savings straight away. Do your research first and use comparison sites like Martin Lewis MoneySavingExpert which is regularly updated with the best deals. Always read the terms and conditions.
Be afraid to get advice. Most financial advice about setting up a savings account is free, you can book an appointment with an adviser in your bank of choice, either over the phone or in person. Help for low income households shouldn’t come at a cost and be careful of any scammers who may be offering financial advice. The internet is the most immediate and cheapest place to start, but Citizens Advice and local money advice charities are also worth speaking to.
Set up a direct debit. Once you’ve got your savings account set up, work out how much you can afford to save each month, set up a direct debit for that amount and then forget about it. Checking your savings account rarely will help avoid temptation to withdraw money too early.
Be fooled by Christmas savings schemes. Always check they offer real value – we could just as easily open our own account and pay into it every week or month. Also, if they collapse they take our money with them. Usually, cash is much safer in a savings account. It could be earning interest too. When thinking of joining a club, check whether they allow or charge customers to cancel and retrieve their money if they need to.
Check that any savings or investments you have are ‘FSCS protected’. This means that if the firm holding your money goes bust, you wont lose all of it. The scheme protects savings of up to £85,000 per individual. If your savings aren’t covered, move them to somewhere that is. (More here on the scheme.)
Useful sites to help you save:
- Check out the Government’s Money Advice Service which has some further information as well as a Savings Calculator
- Check out the Post Office. They have a wide range of savings products.
- Lastly, look at schemes like Premium Bonds, which are run like a lottery that pays out little wins but where you can cash in your original ‘stake’ at any time.