Martin Lewis shared crucial information for anyone with money in a savings account on his weekly STV show Thursday night and began his Big Briefing by asking viewers a simple question: When did you check your savings for the last time?
For many of us, we think that putting money in a savings account is a job well done and we forget about it until it matures or something pops up and we have need extra money.
But according to the finance guru, we could be missing out on much better interest rates available now and he encouraged everyone to review their fundraising pot – big or small – to make sure they are getting their money’s worth. .
The Consumer Champion used a graph to illustrate changes in the highest savings rates over the past year.
He explained: “This [graph] shows you how the highest savings rates have changed over the last year and you will see that they have improved dramatically recently – I’m still not saying they are great, but they have increased a lot.
“” In March, the first easy-to-access account was paying 0.4% now, it’s paying 0.67%, so it’s the same interest but more than half as much.
“The best two-year fix was only 0.74%, now it’s earning 1.76%, so that’s more than double what he paid.”
Martin went on to explain why some of these rates have gone up because just like mortgage rates, long-term forecasts of interest rates have gone up and that’s what they’re based on and there is. of competition in this market when there was no t before.
He also highlighted how fixed rates are now overwhelmingly more competitive than easy access accounts were earlier in the year.
But he warned, “The problem with all of this is that none of these rates are even close to inflation, so the truth is that savings accounts are always ‘losing accounts’, but you want at least the best savings possible because that mitigates the impact of rising prices.
The founder of MoneySavingExpert.com urged anyone with savings to “go check the interest rate you are paying, then compare it to the rates below, as described by Mirror Online.”
All of the accounts below are covered by the Financial Services Compensation Scheme (FSCS) savings protection of £ 85,000.
For low-income people, Martin now recommends the following accounts.
Help to save
Help to Save is a UK government-backed savings account accessible to low-income workers who apply for work tax credits, child tax credits and a universal credit.
If you qualify, you’ll get an additional 50 pence for every £ 1 you save, meaning that over four years a maximum saving of £ 2,400 would translate into an overall bonus of £ 1,200.
You are free to pay as much as you want (up to £ 50 per month) so even if you part with £ 5 per month (£ 1.25 per week) – over two years you will get a bonus of 60 £ on your total pot at £ 180. Over four years, that would amount to £ 360.
The amount and time of savings is up to the account holder, and they don’t need to pay monthly to get a bonus.
Martin explains more about the Help to Save program here.
Isas for life
If you are between 18 and 39, you can contribute up to £ 4,000 per year to a Lifetime ISA on a schedule of your choice, with a 25% bonus paid out after 12 months.
During the life of an account, you can get up to £ 32,000 in government cash, provided you pocket the £ 1,000 bonus each year.
Interestingly, LISAs allow you to invest in the stock market or in cash. You can then use the money to buy a house or save for your retirement.
With a Lisa, you can currently buy houses up to £ 450,000 in London and £ 250,000 outside of London.
However, if you choose to withdraw money, you risk a penalty of 25% of the amount withdrawn.
The top cash Lifetime Isa is currently Moneybox which brings in 0.6%.
If two first-time buyers plan to climb the ladder, you can open one each and double the savings.
The best accounts for everyone
Martin explained that the best savings accounts right now are fixed rate savings, but with fixed rate savings you lock in your money, so you need to be aware of that.
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Martin’s Top Picks
Top 1 year of fixed accounts
Standard Savings – Zopa, 1.35% (minimum £ 1,000)
Cash ISA – Hampshire Trust, 0.95% (minimum £ 1) – can withdraw but there is a 90 day penalty.
Main fixed accounts over 2 years
Standard Savings – SmartSave, 1.6% (minimum £ 10,000)
Cash ISA – Close Brothers, 1.2% (minimum £ 10,000) – can withdraw but there is a 150 day penalty.
Sharia Fixed Accounts
Al Rayan, 1 year, 1.45% (minimum £ 5,000), 2 years pays 1.76%
The best accounts if you need flexibility
The best easy-to-access savings accounts – which means you can withdraw money whenever you want
Cynergy – 0.66% (minimum £ 1) Marcus – 0.6% (minimum £ 1)
Shawbrook – 1.67% (minimum £ 1,000)
Best notice accounts – you can withdraw if you give notice
Secure Trust – 1.1% – 120 days notice or 0.85% for 60 days notice (minimum £ 1000)
Main current accounts
Virgo – 2.% (up to £ 1,000)
Nationwide FlexDirect, 1 year fixed at 2% (up to £ 1,500)
The best regular savers
Natwest and RBS 3% (max £ 50 per month)
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