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Understanding savings
Get peace of mind with a savings account
- Do you have any extra money sitting in your current account?
- Not sure how much interest you’re making on your savings?
- Do you think you could save more if you changed some of your spending habits?
- Are you hoping to splash out on something special in the future, but don’t know where the money will come from?
Answering yes to any of those questions means you should consider how you could make your money work harder for you – both in the short and long term. And that means: saving.
Of course, thinking about tomorrow when today's demands are so pressing can be difficult. However, with costs rising, it's more important than ever to save smart.
At a glance - savings
- A savings account can help you to save up for a particular item or improve your lifestyle in the future
- Saving at least three months' worth of living expenses will help protect you and your family if you’re unable to work
- Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). For more information about the compensation provided by the FSCS, refer to the FSCS website at www.fscs.org.uk. You can also visit our Financial Services Compensation Scheme page for more details.
Getting into the saving habit is easier than it sounds and will give you greater long-term security and peace of mind. There's no time like the present to develop savvy saving habits that can help you become financially independent.
Why save?
There are many reasons why people save, but here are the three main ones:
So you’re covered for life’s unexpected twists and turns
As a rule of thumb, it's a good idea to have at least three months' worth of living expenses saved up to protect yourself and your family. However, if you're like many people, you may not have this much available.
According to our savings expert Danielle, the average person could only last 52 days if they found themselves out of work (this is based on average monthly outgoings of £1,445 and average accessible savings of £2,474), and many people only have savings of £500 or less.
You may never need to use this money but knowing it’s there puts your mind at rest, especially in a volatile economy.
To create a lump sum for improving your lifestyle
A deposit on a house? Tuition fees for your children when it's time for them to go to university? A comfortable retirement? At some point in the future, you'll probably need to have access to a sizable amount of money that you can either use all at once or draw on over time. Either way, you should start saving now, because the sooner you start, the sooner you’ll reach your goal.
So you can buy an item in the future that you can't afford now
This is the exact opposite of buy now, pay later - which was the prevailing attitude in the recent boom times. Wouldn't it be great to have money in the bank you could use to buy the things you wanted or needed without increasing your debts?
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