🔔 How has 2018 been for savers?

As we near the end of another year, we reflect on what a year it’s been for savers.

Firstly, the bad news. A big concern is that the amount we are all actually saving, known as the savings ratio, continues to be at rock bottom levels.

2017 saw us put aside just 4.20% of our disposable income into savings and 2018 is on track to paint just as bleak a picture. To compare, in 1992 we were putting aside a healthy 14.1% of disposable income into savings. As we’ve pointed out before, a healthy savings ratio in a sign of country’s strength - which you could say is something we need to consider with Brexit to manage.

Fundamentally, having a reasonable amount in savings allows you to weather possible future storms, therefore with so many of us putting so little aside, it’s clear most people are seriously under-prepared should there be any shocks around the corner.

So, onto the better news – which may be a help to improve the savings ratio.

In terms of interest rates that are available to savers, the year started off well, with rates on the rise, and encouragingly this has gone from strength to strength – helped of course by a hike in the Bank of England base rate in the summer.

As a result, every savings category has seen a rise in the rates on offer for savers with best buy easy access ISAs up more than 30% since the beginning of the year.  And with standard easy access accounts up more than 15%, it’s probably no surprise that this area of the market continues to be the most competitive. With most of our cash now sitting in easy access accounts (more than 80% of the market), providers appear to be climbing over each other to get a slice of the action and are prepared to boost rates to tempt in new savers.

The launch of newcomer Marcus by Goldman Sachs has definitely played a part in helping to improve rates across the board for easy access savers. The launch of Marcus’s popular easy access Online Savings Account at the end of September this year, which still pays a market-leading 1.50% AER, has created a flurry of activity from providers either trying to beat or at least match the rate.

Marcus seems to have firmly stolen the crown from one-time market leaders RCI Bank who led the way at the beginning of the year but now lag a little behind. Having said this, RCI has upped its game recently with an increase in rate from 1.30% to 1.42% and now the Freedom Savings Account* is the joint best paying simple account (no bonus or restricted withdrawals). And Ford Money has decided to get a piece of the simple savings account action by also increasing the rate on its Flexible Saver* to match RCI Bank. Like RCI Bank, Ford Money has passed this increase on to all customers in the account, it’s not just for new customers.

Fixed Rate bonds have also continued to edge up since the beginning of the year, with the short term accounts proving extremely popular. Top rates fixed for one year have increased by more than 10% with the one year fixed rates ISAs up by more than 17%. Encouraging stuff with the ISA season just around the corner.                     

We’ve ended the year on a bit of high with our Annual Savings Awards, which highlight those providers that have offered savers a good deal in 2018 - and not just in terms of the rates being offered but also fairness, innovation and good customer service.

We’re pleased to include new awards this year including our inaugural Savers’ Choice award - voted for by you. It’s proven incredibly successful and well received by customers and providers. And it was Close Brothers Savings that took the Saver’s Choice crown, a well-deserved win.

To see the winners and finalists of this year’s awards, take a look here. And the Savers' Choice Award judging has now been re-set - so don’t forget to leave reviews of your experiences of opening savings accounts throughout the year.

And finally, 2018 has to be the year of the Cash Savings Platforms. Taking the market by storm this latest innovation is proving really popular with savers, especially those with sums over the Financial Services Compensation Scheme limit of £85,000 per person, per banking licence, who just want the ease of one application and a competitive return with money protected. We’ll shortly be launching our brand-new Guide to Cash Savings Platforms for those looking to learn more.

The guide includes the leading providers currently out there and how they compare. You’ll be able to see clearly which provider might best suit your needs and requirements, with more providers being added as they come to the market.

If you’d like more information on any of the areas covered in this article, don’t hesitate to contact us at [email protected] or call us on 0800 011 9705.

*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).

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