Did you know 34% of adults in the UK have either no savings, or less than £1,000 in a savings account? Saving is an important skill which can help you when things get tricky.
Why should I save?
The idea is to use your savings to buy something such as a car, a holiday, a house, or to go towards unexpected emergency costs.
It is something which you do over time. For example, putting a certain amount each month into a savings pot or account when you get paid.
Everyone should save, even if only for a rainy day. Doing so can give you peace of mind in the short term should you need to pay for something unexpected. It can also be a way to help you achieve mid to long-term goals.
How much should I save?
It is considered a clever idea to have at least three months’ worth of living expenses saved somewhere safe and accessible for emergencies.
However, how much you save depends on what you can afford.
Popular ways to budget are the 50/30/20 method and the 80/20 method. These suggest keeping 20% of your income as savings and using the rest to pay for other costs each month.
According to a survey by the Money and Pensions Service (MaPs), around a quarter of UK adults (11.5 million people) have less than £100 in their savings account, with one in six people having no savings at all.
Our five benefits to saving
It will help you in emergencies
Emergencies are always unexpected. Therefore, when they occur, the funds required are usually not part of your regular budget.
Accumulated savings can often go a long way in alleviating these emergencies.
It can help limit debt
Having some amount in savings can help to limit the amount of debt needed, as they can be used to finance certain expenses instead of using a credit card or personal loan. Savings can also help you to avoid the need to take out an emergency loan when urgent situations occur, which often come with a higher interest rate.
Could help when facing sudden job loss
You may have a job now, but what if you were to lose that job? Suddenly finding yourself unemployed can be frightening and traumatic, but it is something many people will experience at some point in their lives.
Having savings in place to help cover your living expenses while you find a new job can provide you with peace of mind.
Helps prepare you for retirement
When you start the savings habit, it pays to think about the long-term, as well as what might be just around the corner.
Making a habit of saving a small portion of your income over several years can accumulate into a substantial amount of retirement funds, which will help to make your retirement much more comfortable.
Helps finance those big-ticket items and major life events
Whether you are looking to buy a house or car, get married, or even start a family, many big life events can often carry a hefty price tag.
For some of these, the thought of reaching for a credit card or taking out a personal loan is all too easy. However, using savings to help fund these things is a much better option than putting yourself in debt and having to repay the funds borrowed along with interest.
How can I set up a savings account?
At Homes in Sedgemoor, we refer all our customers to West Country Savings and Loans.
Westcountry Savings and Loans are the largest not-for-profit credit union in the South-West of England.
Their mission is to be the savings and loans organisation of choice in the communities we serve; to provide important levels of customer service.
They also work with nine other social housing providers throughout the South-West, all providing affordable savings accounts and saving schemes to their customers.
To set up a savings account with Westcountry Savings & Loans you will need to join the credit union. This is done via an automated form using Nivo, their secure instant messaging platform.
To start, you will need to download Nivo to a smart device. If you do not have a smart device, there is information at the bottom of this page on how to join.
It takes around two minutes to join, Nivo will guide you through a series of questions about you and how you would like to save. If you have a photo ID (e.g., passport or driving licence), please have this handy before you start.
When the savings process is complete, Westcountry Savings & Loans will need you to make a card payment to activate your account, this could be as small as a few pounds. Once you have made this your account will be open and you can start growing your balance!
They will send you a welcome email with your membership number and tips to get you started.