The UK’s Money Saving Expert, Martin Lewis, has urged anyone with money in a savings account to “check it now”.
This is despite the size of the account, as account holders may actually be currently underpaid on their savings returns. As such, Lewis has issued an urgent warning to the UK public to ensure that they are getting their best value for money.
This warning will be welcomed by many who are facing the pinch from earlier this year, as the cost of living crisis continues, inflation rises, and households are forced to cut back on their spending habits.
In Lewis’ latest moneysaving.com newsletter, sent out to 10,000’s of email subscribers, the expert estimated that UK households were able to put aside around £180 billion in savings during the Covid pandemic. The majority of this amount can be put down to the instrumental working from home measures and travel restrictions, which meant that people were saving on daily commutes as well as international travel and tourism.
However, the fall in interest rates from earlier this year has meant that those with savings are failing to reap any rewards from doing now. Find more information here about getting started with investing.
Lewis went on to add that it has “never been more important to maximise every penny of savings interest. With inflation roaring, in real terms money in savings is shrinking. To mitigate the impact, you need as high a rate as possible.”
According to the Money Saving Expert, top savings rates have in fact now skyrocketed to their highest levels since the pre-pandemic in July 2019. Lewis added that if an account’s savings rates are below 1.5%, this actually means that you are being underpaid and that you shouldn’t “stand for it”.
The minimum savings [accounts] should pay is 1.5%. This is because this is the rate set by the top easy-access accounts. Lewis went on to warn readers that if “you’ve not switched savings account in the last couple of years, you’re likely earning just 0.1% or less”.
Lewis finished off this warning by issuing a list of saving account options offering rates of 1.2%, 1.5% and 2.3% if account holders are in a position to put their cash away for a fixed term.
As such, the best savings accounts at current are fixed-rate savings. The below lists Martin Lewis’ top picks for those are are able to put their cash assets away for a fixed term:
- Top 1 year fixed accounts
For standard savings, you can get a rate of 1.35% with Zopa with a minimum of £1,000 in savings.
For Cash Isa’s, you can get a rate of 0.95% with Hampshire Trust with a minimum of £1 in savings.
- Top 2 year fixed accounts
For standard savings, you can get a rate of 1.6% with SmartSave with a minimum of £10,000 in savings.
For Cash Isa’s, you can get a rate of 1.2% with Close Brothers with a minimum of £10,000 in savings.
Earlier this month, Lewis also shared information about the UK Government’s Help to Save scheme.
The state-operated scheme is available for millions of households on low incomes. It allows people who are entitled to Working Tax Credits or receiving Universal Credit to get a bonus of 50p for every £1 that they save over a period of four years.
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