Savings experts have revealed how you can maximise your savings despite the increased pressures of the cost of living crisis, as new national research shows that 60% of Brits are financially worse off.
The data released by the ONS today¹ found that the price of food shopping (96%), gas or electricity bills (57%), the price of fuel (37%) and rent for mortgage costs (27%) ranked as the key reasons for increased cost of living in recent months.
This has had a major impact on savings, with statistics² showing that more than half (55%) of Brits have reduced their savings contributions, with over a third (35%) not saving anything during this financially-difficult time.
To help Brits boost their savings potential, experts at money.co.uk reveal how you can maximise your savings during the cost of living crisis.
Lucinda O’Brien, an expert at money.co.uk savings accounts, said, “The sky-rocketing mortgage interest rates, energy costs and prices of essential items in recent months has meant that many people have struggled to make ends meet, nevermind build their savings.
“But building savings – particularly an emergency pot – is really important so you’re prepared for any unexpected costs or loss of income. This is even more true during the cost of living crisis when everything costs more and money is tight without anything else coming up.
“As a general rule of thumb, it is advisable to follow the 50/30/20 rule when it comes to managing your money: 50% of your income should go towards necessities, 30% for spending on wants and 20% into savings – but for many, given the increased cost of living, this just isn’t possible.
“Even putting £10 a month away is a start, and instant or easy access accounts allow you to deposit or withdraw cash as you see fit. Plus, you’ll earn interest on your money as some easy access accounts are offering up to 4.45%.
“Taking this approach means you can put something aside and start building your savings, knowing that you can still easily access that money if needed.
“Research by the BSA found that almost a quarter (23%) of savers don’t check the interest rate before opening an account, with a third (33%) failing to compare interest rates between other accounts.
“Now more than ever, it’s vitally important that your money isn’t sitting in a 0% interest account and that you are getting the best interest rate possible to maximise your savings. Remember to always compare savings accounts to find the best deal.”
For more information and guidance on saving, visit www.money.co.uk/savings-accounts.
References
- ¹Impact of the increased cost of living on adults across Great Britain: February to May 2023
- ²The effect of cost of living on UK business statistics 2023
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