Trying to build a rainy day savings pot that can be relied upon in emergencies has become a priority for many households during the current economic uncertainty.
Across the UK, more than nine in 10 (91%) adults believe having a rainy day fund is important, according to Aldermore Bank.
Over half (55%) say lockdown has made saving more of a priority for them. And nearly three-quarters (74%) of 18 to 34-year-olds surveyed want to prioritise savings more in the future.
With finances tight, a third (35%) of people surveyed have dipped into existing savings during the lockdown, the survey of 2,000 people found.
And more than half (52%) of people are concerned they are not saving enough, while a quarter (24%) have been relying on their overdraft or credit cards during this time.
Lack of savings has caused emotional strain also, with two in five (43%) UK adults saying they feel stressed that they do not have enough in their savings accounts to weather financial shocks.
Ewan Edwards, head of savings at Aldermore, says: “We have learned this year to expect the unexpected, but having financial buffers in place can ease the stress and emotional impact felt from such shocks.”
5 tips to grow your savings
Here are 5 tips from Aldermore for building a fund for emergencies…
1. Check where your savings are currently being held
Interest rates may be low, but interest can add up over time, so it is worth investing some time looking around for the right savings product that fits your needs.
2. Don’t just put aside loose change
Try and save a set amount each month. Save regularly and consistently.
3. Cut down on unnecessary spending
Now is a good time to reflect on our spending habits and identify which expenses we can afford to live without, going forward.
4. Cancel direct debits that drain your savings potential
Car insurance for example is often cheaper if you pay yearly, instead of monthly. It’s also useful to continually review monthly subscriptions, such as streaming or music services, and consider freezing or cancelling those little used.
5. Review your savings habits regularly
If you are having difficulty meeting your target amount, reduce your monthly contributions to make it more manageable. But even if you can’t save as much as you’d like, don’t give up. Try to keep paying money in as it will soon add up.
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