We all start a new year with a list of things to change, things to do differently or indeed new things to try and that applies to financial matters as much as any other aspect of our life.
So, if we put to one side dieting, getting fit, new hobbies and so on for the moment, how can we improve our savings in 2018?
The first thing to consider for anyone still languishing in a poor-paying account is to take the time to switch to an alternative. Our Rate Tracker service will let you know what the state of play is with your current savings accounts and our independent best buy tables and regular email Rate Alerts will keep you fully informed as to what the best options are to switch to.
Beyond this general piece of good advice, there will be a number of you out there that still have savings with their high street bank. It is understandable to want to stick to a provider you are familiar with – after all, sometimes it’s a case of better the devil you know. However, times have changed in the savings market and by doing this, you could well be missing out on precious interest.
High street providers are offering some of the worst-paying accounts currently on the market and you can do much better elsewhere. For example, even following the increase in the Bank of England base rate in November, HSBC’s Flexible Saver is paying a paltry 0.05% gross/AER - just £2.50 a year on a balance of £5,000.
Now, just by switching to a new easy access account - for example 1.32% gross/AER from the AA, which is the top-paying rate at the moment – you will receive an extra £63.50 for the year, which is not to be sniffed at!
So, let’s take this to the logical conclusion – don’t stick to a provider because of its name or your familiarity with it, some of the highest-paying options in the savings market are with providers that you won’t have necessarily heard of. And don’t let this put you off, after all any provider that features on our website is subject to the same regulations as the big banks and your money will still be protected under the UK Financial Services Compensation Scheme (FSCS) or European equivalent scheme.
The impact of some of the newer names to the savings market over the last few years has been phenomenal, certainly without these so-called ‘challenger banks’, the savings market would have been a much gloomier place. The key to note is that these newer providers want your funds and are prepared to attract you in with better interest rates. Get a couple of these providers competing and all of a sudden, you have interest rates pushing in the right direction. And this has been the story of the last few years.
Let’s take for example one of the most consistent performers over the last few years, RCI Bank. A fixture in our easy access table in particular since its launch in June 2015, this provider has been in and around the top of our table ever since, challenging other providers to join them. Read more about RCI Bank in our latest provider focus.
So, there is no doubt that the newer names to the market have had a positive impact on interest rates, so why not take advantage of some of the better rates on offer this year and try someone new, after all it is your pocket that stands to gain!
2017 was a good year for new entrants to the savings market, a number of which made an immediate impact on our best buy tables, most noteworthy of which were PCF Bank and Wyelands Bank, winner and highly commended in our 2018 Best New Provider Award. And 2018 could see more of the same, with a number of providers waiting in the wings and finalising their launch plans. All our 2018 award winners can be found on our website https://savingschampion.co.uk/awards/.
Keep your eyes peeled as we bring you all the latest news throughout 2018, with any new notable accounts launched and any interesting new providers that make a splash in the savings market. We will be keeping on top of all new developments as they happen and of course will continue to keep you up to date.
So, whatever your financial plans are for the new year, make sure you are considering all providers – don’t just look for the easiest option, look at the one that will have the greatest positive impact on your plans and in particular your wallet.
Savings Champion is here to help – if you would like to discuss a provider in more detail, please get in touch and if you have any savings success stories, please feel free to share them. Call us on 0800 321 3581, we’d love to hear from you.