Eye-watering inflation and interest rate rises over the past two years have made it harder for some Britons to even think about saving, Hodge Bank has warned.
Commentators have said they expect the Bank of England to announce that the inflation rate has risen slightly this week (August 14), although it has been at or around target over the past two months (according to the Bank of England/Office for National Statistics).
This morning inflation rose to 2.2 per cent.
According to Hodge Bank, it is important to help provide guidance to people to get started on the savings journey, as they can build up a decent, inflation-beating investment pot for the future with a few simple steps.
Christie Cook, the retail managing director at Hodge Bank, said that due to the current economic situation, many individuals are having difficulty considering saving.
With that in mind, she has shared ways to help these individuals make better informed decisions about their savings.
Her tips:
1) Choose the right account
It is important to understand the basics and get the right account for one’s needs. For example, cash Isas are great for tax-free savings on a large sum with low withdrawal costs, while fixed-rate bonds may suit those not needing immediate access to their money.
2) Strike a healthy balance between saving and spending
Cook said: “When you embark on your savings journey, it’s essential to strike a healthy balance between saving and living. With the hustle and bustle of daily life, you might want to treat yourself to little luxuries, whether that be a coffee, takeaway or a night out with your friends.”
3) Start small, start manageable
Starting with a manageable monthly amount, such as £10, £20, or £50, is a good way to begin saving.
4) Remember life is unpredictable
Hodge said it was good to keep this in mind, as having something to fall back on in case of financial emergencies is always a wise decision.
She added: “In the current economic climate, it’s understandable that people are finding it hard to think about saving, with inflation impacting the cost of living and interest rates fluctuating.”
Fardeen Anan is interning at FT Adviser
