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A third use piggy banks to save

A third use piggy banks to save

Category: Savings

Updated: 15/10/2015
First Published: 15/10/2015

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Using piggy banks is something that many of us get into the habit of in childhood, with pocket money and any extra pennies being carefully stored away inside. However, while many people revert to using savings accounts (or similar) when they get older, it seems that a surprising number have carried the piggy bank habit with them into adulthood…

Lack of interest

According to research from Aviva, over half (56%) of respondents classed themselves as savers over spenders (44%), and a further 45% said that that they save on a monthly basis. While some have no specific goal in mind, one in three (32%) are saving for a key purpose, with holidays and rainy day funds topping the list.

However, to really make the most of your savings and achieve your goals, you'll probably want to find the right savings vehicle. Bank and building society savings accounts are still the most popular way to save, with 66% of respondents using them. A further 46% use cash ISAs to make the most of their hard-earned cash, but another 32% keep at least some of their savings in cash form.

This piggy bank method means that many savers are losing out on potential interest gains, as although savings rates aren't overly impressive at the moment, anything is better than nothing. Not only that, but keeping your money in cash could actually reduce the value of your savings, with inflation (when it gets out of negative territory) leaving you with less money in real terms.

Make the most of your savings

Of course, there's nothing wrong with using a piggy bank as a way of collecting those pockets of spare change, but it shouldn't stay that way forever – once you've built up a suitable sum, you'll want to deposit it straight into the bank!

Setting up a dedicated savings account or cash ISA will be ideal for this purpose, preferably an easy access version that will let you add funds at will – whenever the piggy bank is full – or a notice account if you don't think you'll need quick access to your savings.

Ideally, you'll want to use these accounts to make regular transfers from your current account, too. Try to get into the routine of siphoning off a set amount of your salary each month and putting it straight into a savings account – pretty soon, it'll become like any other expenditure and you won't even notice the money going out. A regular savings account could be perfect for this as it'll encourage you to get into the habit, and it'll definitely beat the piggy bank!

What next?

Compare savings accounts and cash ISAs

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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