The provider said it is ‘critical’ for people to do this
Nationwide Building Society has issued a significant update concerning savings accounts. The provider offers various accounts, including instant access and fixed-term accounts, alongside cash ISAs.
Stephen Noakes, director of retail at Nationwide, recently spoke before MPs on the Treasury Committee regarding its efforts to encourage people to build their savings. He spoke about the concerning reality that many people have minimal savings set aside to see them through tough periods.
He referenced research Nationwide participated in, which revealed that people who can accumulate £2,000 in savings are 60 percent less likely to struggle with bill payments. The director said: “Even a small buffer makes a big difference to their resilience.
“It is critical to start developing that savings behaviour. In the steps to saving, which the research also talked about, that is a pathway to potentially getting into home ownership and beyond. It is absolutely important that we do that.”
Mr Noakes was questioned about the significance of this savings cushion when the building society evaluates whether to approve a loan to someone, such as a mortgage. He explained: “Savings will typically give you a sense of the level of deposit that a customer is able to make.
“If, essentially, they are able to clear savings on a monthly basis, that gives a sense of the affordability to the loan as well. Those are the steps to saving.”
However, he restated his main concern that people simply don’t have sufficient funds set aside. Mr Noakes emphasised: “I shall go back to the start, which is the number of households today that are nowhere near £2,000 or even the £200.
“This is where the broader initiative comes in with national savings week and the commitment to get two million customers who currently are not saving to start that savings habit by 2030. That is a Building Societies Association target, and we fully support and embrace it.”
UK Savings Week is scheduled for 21 September to 27 September this year, a campaign to help motivate people to develop a regular savings routine. Those planning to make regular contributions can get a relatively attractive 6.5 percent rate with Nationwide’s Regular Saver.
You can deposit up to £200 monthly into the account over a 12-month period. The interest rate is variable.
A number of providers offer regular saver accounts with competitive interest rates, though you can only contribute up to a specified amount each month. The highest rate is currently available from Principality Building Society, which offers 7.5 per cent fixed for six months.
You can pay in up to £200 monthly into the account. Consumer expert Martin Lewis recently clarified a common misconception about how regular saver accounts work.
