Controlling Your Savings

We all know how important it is to save for a rainy day, yet a growing number of people saying they have very little savings; in fact, 2011 research from Mintel shows 22% of families have no savings at all. That trend seems to be changing slowly, and recent data indicates that interest rates are going up which is great. On the downside, though, there are more and more restraints being placed on how much you can withdraw.

Here are the advantages and disadvantages of various types of savings:

It’s your money (is it really?)

Moneyfacts says the average interest rate on the top 10 savings accounts has gone up from 1.39% last year to 1.48% this year. It’s a small increase that may grow bigger this year according to projections. However, if you need money right away from your account, there are more restrictions that may say you can only withdraw three times a year. Don’t worry, you have options.

Everyone is Different

The best savings solution for you won’t necessarily be the same for your parents. The ideal fit will depend on age, income and financial goals. There’s been a lot of hype over bonds paying as much as 4 % with joint savings of up to £40,000. This deal occurred between January and May 2015, but you can do other things to boost your savings. This includes increasing your state pension or obtaining energy grants for your home. With age, you can become eligible for things like discounts and freebies, so be prepared to research what’s available to you.

Are you under 65 and with a lump sum of less than £5,000? Go for a high interest current account. You do have to make minimum monthly deposits between £500 to £1500. Regular savings accounts, bonds or peer to peer lending can all be great options.

You may find a cash ISA, or individual savings account, would be best. These are tax-free savings account even though the rates are low.

No matter how old you are, you should keep up with good savings habits no matter what the vehicle. If you need cash, you may find a short or long term loan may be preferable to hitting up your savings. Consult with an expert and do your research before making a decision.

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