National Financial Awareness Day takes place on 14th August each year and offers an excellent moment to reflect upon and re-assess your financial situation and plans. The aim of Financial Awareness Day is to educate people about how to manage their finances, make informed decisions and share information on how to put measures in place for a secure financial future.
We conducted a survey with Recognise Bank colleagues to learn what they are saving for and how they are achieving their goals. Read on to find out more.
What were the most common savings goals?
A common way to make saving feel like less of a chore is to establish clear financial goals. Visualising a specific end point can turn saving into a purposeful journey rather than a burdensome task.
Savings goals can typically be divided into short-term (within the next 6-12 months) and long-term goals (such as retirement or purchasing property).
At Recognise Bank, 24% of respondents were saving for short-term goals, 33% were savings for long-term goals, and 43% were saving for both.
Holidays and breaks
Holidays emerged as the most popular short-term savings goal for the Recognise Bank team and public alike – over 50% mentioned saving for leisure travel and experiences. With summer in full swing, it is no surprise that many are saving for getaways whether abroad or in the UK.
Deciding on the best savings tool for your holiday can depend on your current financial situation and how much time you have before your trip. A fixed or notice account may be especially helpful for those who like to plan holidays in advance, or those with children or dependents who are often restricted by the times of year they can travel and may face increased costs.
As a Recognise Bank customer, you can open a 95 Day Notice Savings Account and earn 4.95% AER to grow your savings without having to lock your money away for a long time. With an initial deposit starting from £1,000, you can open your account and continue to make regular deposits, allowing your money to work for you right up until you are ready to withdraw your funds once the notice period has expired.
Notice accounts such as these can be helpful if planning ahead for holidays or trips happening at a set time or building an extra reserve for a rainy day.
Emergency and rainy-day funds
Saving for emergencies, such as unexpected expenses, followed close behind as another popular goal for Recognise Bank employees, with 43% mentioning this as a key goal. Whether it is a car breakdown or home repairs, having accessible funds can provide peace of mind by ensuring a financial cushion.
Savings of this nature are often a key concern for business owners, too. Maintaining an emergency fund can help to protect businesses from unexpected crises, or periods of economic uncertainty. As MoneyHelper, the UK arm’s-length government body suggests , the rule of thumb for personal emergency savings is around three to six months of monthly expenses. Businesses may choose to use a similar reference point as their goal for emergency savings. In either case, a savings account with unrestricted access to funds may be the most suitable in cases such as these where emergencies are unpredictable.
Easy access accounts such as Recognise Bank’s Business Easy Access Issue 1 allows you to earn 3.15% AER interest with a minimum deposit of £1,000 and Business Easy Access Issue 2 allows you to earn 3.55% AER in terest with a minimum deposit of £85,001, whilst maintaining instant access to your funds should your business need it.
Retirement and pensions
For one-third of Recognise Bank employees, building a retirement nest egg is the sole financial goal. As the UK government plans to increase the state pension age to 66 and beyond, it is clear that securing a comfortable retirement is ever more prominent in the minds of today’s workforce.
Long-term savings goals such as retirement can require many years of planning and development, depending on what age you start saving. Research from the Department for Workplace and Pensions suggests that two thirds of 40–75-year-olds have started saving for retirement by their thirties , leaving roughly 30 years to save ahead of the state pension age. Over this period, savers may choose to use multiple savings tools to build on their funds and to capitalise on the benefits of each.
What savings tools do our team use to make the most of their savings?
When we spoke to individuals across the Recognise Bank team, they revealed that an instant access savings account is the most popular account to store additional funds whilst earning interest, with four out of five (81%) stating that they have this type of account. Close behind with two out of three (62%) revealing they also hold savings in tax-free savings accounts such as ISAs.
“I’m not only saving for myself but also for my family and their futures. Surprises are inevitable, so saving some of my income and allowing it to earn interest provides me with a good financial buffer. I find it helpful to use a few different savings tools so my savings are split across savings accounts, ISAs and budgeting apps which help me adjust my plans as my goals change.” – Recognise team member
Depending on the type of savings goal(s) you have, there are various savings accounts you may be able to use to help get you to your end point. Recognise Bank offers many different savings accounts for both personal and business savers which can help you earn interest whilst reaching your financial goals. Explore our range of personal and business savings accounts today at www.recognisebank.co.uk
1 https://www.moneyhelper.org.uk/en/savings/types-of-savings/emergency-savings-how-much-is-enough
2 State pension age changes and retirement age increases | Age UK
This content is provided for information only and should not be treated as tailored financial advice for you. Please speak to an independent financial adviser or other financial professional before taking any decisions based on the information provided in this blog. You are responsible for your own financial decisions and neither the author nor Recognise Bank will be responsible for any losses, of whatever kind, that you might suffer as a result of you relying on this post.
