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Savers urged to consider regular contributions

Savers urged to consider regular contributions

Category: Savings

Updated: 21/05/2012
First Published: 21/05/2012

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 It is now over 6 months old so the content may be out of date.

Savers setting up monthly payments into their savings accounts are getting ahead of the game when it comes to building up a nest egg.

Consumers using a regular savings account to squirrel away their funds are able to set up a direct debit or standing order to go into their account each month.

Many choose for their deposit to be transferred just after they've been paid, with the accounts allowing monthly payments of up to £300.

And research by first direct has found that getting into the monthly habit of saving has long-term benefits.

A quarter (25%) of all UK adults have adopted a regular, automated savings habit, transferring an average of £99 to a savings account each month.

Only 6% of those with a regular savings transfer decide to cancel their payments within the 12 months, enabling them to amass a substantial nest egg and benefit from strong returns.

Those putting away the maximum £300 each month can earn yearly interest of up to £156.

Men are most likely to sign up to a regular savings direct debit, with 28% set up with a monthly transfer compared to 23% of women.

Men also tend to put a higher amount away, at an average of £130 a month versus £89 saved by women.

"With numerous pressures on our household finances and a lot of payments to juggle and keep on top of, it can be difficult to remember to set aside the money to save, which is why a regular, automated savings habit can be the best habit to get into for those who are able," said Bruno Genovese, head of savings at first direct.

"Once set up, they require minimal effort to manage and are often left to run and run, helping savers to build a substantial savings pot."

To find the best regular savings accounts on the market, be sure to use the Best Buy tables.

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 Any products featured may be withdrawn by their provider or changed at any time.