As a nation of spenders it’s hard to turn normality on its head and become a nation of savers, but with an aging population, diminishing pension pots and unsecure and unknown futures, it will be down to the individual to provide for themselves anything more than just a basic quality of living.
It’s not really our fault. We aren’t exactly being supported. The Bank of England has chosen to hold the 0.5% interest rate for yet another quarter, hoping that spending rather than saving will drive us out of recession. Additionally, the easy availability of credit cards and, prior to the recession, loans and mortgages has turned what was once a nation of savers into a nation of spenders.
So just how do you go about saving in this day and age? Saving doesn’t have to be complicated and it shouldn’t feel like hard work. The first step is to set up a savings account. There are various types available from instant access accounts, which offer – yep you guessed it – instant access via ATMs, online and in-branch banking to fixed-rate bonds which may tie your money up for as much as five years without any free access. Obviously, you can also invest money in stocks and shares and hope to make a profit, but this is not something we have space to deal with here.
Currently some of the best savings options are Santander savings accounts. It is offering 4% on its two-year fixed rate major cash ISA and 3.2% on its instant access eSaver Santander savings accounts. If you don’t already have some money set aside you’ll need an account that allows you to make regular deposits.
Once your account is sorted, you’ll need to start changing your habits. The first thing to do is to put anything left over at the end of the month into a savings account. Even if it’s just £10, it’s better than nothing and over several years tens of pounds can add up to hundreds even thousands of pounds.
Start recording how much you spend each month and what you spend it on. You will probably find there are areas where you can cut back your spending and any savings made can then be transferred to your dedicated savings account.
Avoid buying things on credit. Get in the habit of waiting and saving up for more costly items. You’ll not only have to pay any interest on purchases, but you’ll also feel as though you’ve really earned that new TV or iPhone.