General Discussion and Whimsical Banter

ircE

Challenger banks look to exploit higher savings rates - FT

An interesting in-depth piece on the current savings landscape in the wake of rising interest rates. Some quotes:

• “Previously, literally everybody was putting money into an instant access or maybe a bit in a one-year fixed-term account,” he says. “We’ve seen a new cultural behaviour of staircasing, taking savings deposits and splitting them across various different terms.”
• Between January 2022 and March 2023, the nine biggest lenders — which includes Lloyds, HSBC, NatWest and Barclays, alongside Nationwide, TSB, Virgin Money and the Co-operative Bank — increased their savings market share from 48.3 per cent to 49.7 per cent, according to the FCA’s cash savings market review in July. Digital challengers, by contrast, grew their share from 3.7 per cent to just 3.9 per cent.
• 75 per cent of people keep savings with their current account provider

RG2015

refluxer said:

@RG2015 Wow, that's freaky ! Great minds...?!

Spooky!

And I thought we had seen the back of Halloween for another year.

Eirambler

That 75% keep their savings with their current account provider is just crazy to me. No wonder banks offer such big switching bribes for current accounts. When I switched bank a couple of years ago I automatically received a savings account alongside my new current account. But it just sits there with nothing in it, because the rate is rubbish.

Granted it will be different amounts for different people, but in our household we're looking at an additional income of over £6,000 for this financial year across various savings products (including standard savings accounts, ISAs and Premium Bonds) - completely tax free. Now that has involved a little bit of effort and money management to keep on top of increasing rates and tracking interest to make sure there are no tax issues, but I find it amazing that there will be thousands of others who could have done the same and will only bring in a few hundred pounds in interest instead.

mebu60

Eirambler said:

That 75% keep their savings with their current account provider is just crazy to me. 

That was my first thought too. However, dependent where you seek your facts, 34% of UK adults have no savings or <£1k and the median average UK household savings is £2160 annually. The majority of those 75% therefore are likely to have a modest amount in savings so the incremental benefit of chasing rates will be small in £ terms, if they even have the time or inclination to think about such things. 

LHW99

mebu60 said:

Eirambler said:

That 75% keep their savings with their current account provider is just crazy to me. 

That was my first thought too. However, dependent where you seek your facts, 34% of UK adults have no savings or <£1k and the median average UK household savings is £2160 annually. The majority of those 75% therefore are likely to have a modest amount in savings so the incremental benefit of chasing rates will be small in £ terms, if they even have the time or inclination to think about such things. 

Or perhaps as my OH & I do: we keep a small amount in the savings account attached to our main C/A to ensure we can meet a sudden bill when the C/A is low (due to SP being 4-weekly or just a month with heavy expenditure).

Albermarle

mebu60 said:

Eirambler said:

That 75% keep their savings with their current account provider is just crazy to me. 

That was my first thought too. However, dependent where you seek your facts, 34% of UK adults have no savings or <£1k and the median average UK household savings is £2160 annually. The majority of those 75% therefore are likely to have a modest amount in savings so the incremental benefit of chasing rates will be small in £ terms, if they even have the time or inclination to think about such things. 

Similarly outrage in the Daily Mail etc about the £1000 personal savings allowance and £20K ISA limit being now too low, only affects a small % of society.

Albermarle

dealyboy said:

masonic said:

caper7 said:

Just saw someone has "Bowlhead Rip" at the bottom of their post. 
I've looked him up and not much to be found. 
Was he banned, chose to leave, or has he actually died?

bowlhead99 was one of the most prolific and knowledgeable contributors this board has known. So naturally, he got targeted by others resulting in him being banned. He came back for a while as underground99, but after a while faced the same fate. One has to walk on eggshells to survive a long time here.

Indeed.

Although I'm not criticizing the mods (they have a very difficult job to do) I sometimes wonder what the [deleted] user did, we have lost so many. It seems to happen to the best of us.

I believe he overreacted in a personal message after being goaded by a troll . A good reason not to get involved with personal messages if possible.
I also understand he went through some kind of unexpected life/family?  event shortly after being banned, and decided not to continue/ try and get reinstated.

xylophone

I believe he overreacted in a personal message after being goaded by a troll . A good reason not to get involved with personal messages if possible.
I also understand he went through some kind of unexpected life/family?  event shortly after being banned, and decided not to continue/ try and get reinstated.

I am sorry to hear this - I found his posts thoughtful and informative,

mebu60

LHW99 said:

mebu60 said:

Eirambler said:

That 75% keep their savings with their current account provider is just crazy to me. 

That was my first thought too. However, dependent where you seek your facts, 34% of UK adults have no savings or <£1k and the median average UK household savings is £2160 annually. The majority of those 75% therefore are likely to have a modest amount in savings so the incremental benefit of chasing rates will be small in £ terms, if they even have the time or inclination to think about such things. 

Or perhaps as my OH & I do: we keep a small amount in the savings account attached to our main C/A to ensure we can meet a sudden bill when the C/A is low (due to SP being 4-weekly or just a month with heavy expenditure).

Good point. I currently have quite a bit in my savings account attached to my main current account as it's Santander at 5.2% but the norm is a much more modest amount. I also have £50 and £100 in two other savings accounts attached to current accounts elsewhere that both contain £1. Apart from HMRC, no-one I can think of would know whether someone with a current account plus attached savings account had savings and investments elsewhere. 

ircE

LHW99 said:

Or perhaps as my OH & I do: we keep a small amount in the savings account attached to our main C/A to ensure we can meet a sudden bill when the C/A is low (due to SP being 4-weekly or just a month with heavy expenditure).

Yes, I imagine a lot of the 75% are extending the same logic for all of their savings: "why not keep it all together with my main current account, just in case?"

Personally I use a savings account with one of my current account providers to save money from my salary (which sits in a current account at another provider), corresponding to credit card payments. Then once a month I transfer the payments to my current account the night before to pay the DD. It gets a tiny bit of interest as well as helping me compartmentalise my credit card spending every month.

The vast bulk of my actual savings is sat in savings accounts paying much higher interest, as I suspect is the case with others here.