Derin Clark

Derin Clark

Online Reporter
Published: 18/10/2019

Young adults are more likely to save than any other generation, mainly due to fear of losing their jobs and wanting to get onto the housing ladder.

A recent study from Lloyds Bank reveals that 78% of 18-24-year olds are actively saving money with a deposit for a new home or out of fear of losing their jobs cited as the main reason for doing so. This compares to 67% of all UK adults actively saving.

The study also found that if they lost their jobs today, 7% of UK adults have no savings at all on which to fall back on, 18% would not be able to survive more than a month and 30% would be able to live off their current savings for up to six months.

Jo Harris, managing director at Lloyds Bank said: “Millions are at risk of not having savings to fall back on should they lose their job or have to stop working. Being prepared for these unexpected circumstances as well as starting to save for the future can sometimes feel daunting, particularly for those on lower incomes unable to put away large sums.

“While it might seem like a slow uphill battle, small savings can really add up and when done regularly over a long period of time it can result in a significant sum. There are tools and accounts available to make saving easier and simple saving tricks will help set yourself up for the future.”

Which savings account should you choose?

For savers looking to save money in case they lose their job, an easy access savings account will often be the best choice as it normally permits savers to add money whenever they can and allows quick access to their funds. Unfortunately for savers, 2019 has seen some of the top rates in the market cut. As an example, Moneyfacts.co.uk research found that just last month top rate of 1.60% gross was available as an expected profit rate on the Everyday Saver from Al Rayan Bank. It was subsequently withdrawn and replaced with a new issue paying 1%. The account that is currently topping the chart is Coventry Building Society’s Triple Access Saver paying 1.46% AER yearly, including a 0.31% bonus until 31 March 2021, on an opening deposit of £1. This account allows savers to make unlimited further deposits and three penalty-free withdrawals per annum, while further withdrawals after this are subject to 50 days’ loss of interest.

Marcus by Goldman Sachs® and Virgin Money are also still offering highly competitive rates in the easy access chart as both continue to pay 1.45% AER on a £1 deposit. Marcus by Goldman Sachs® pays this rate on its Online Savings Account, which includes 0.10% bonus for 12 months, however savers should be aware that the interest is paid monthly at 1.44% gross. Both unlimited additions and withdrawals are allowed on this account. Virgin Money pays 1.45% AER on its Double Take E-Saver Issue 12 and its Man Utd Double Take E-Saver Issue 7. Both accounts allow unlimited further deposits but restrict withdrawals to two per calendar year including closure.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Saving little and often is essential to build a pot in case of emergencies or to save towards a specific goal. Consumers could easily get caught out if they have no other means to pay for a surprise bill when they don’t have any savings provisions. Indeed, if someone has no insurance to cover a job loss then they could find it hard to pay for their essentials. Not only this, but if consumers rely on their overdraft to make ends meet, they could face eyewatering charges and perhaps struggle to get back in the black.”

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