Martin Lewis is urging everyone with money in a savings account to check how much interest they are making on it and warns that if the rate is under 1.5% then you need to act now to boost it. The financial guru says the very least anyone should be earning, on any savings amount, is 1.5%.
In the latest edition of the MoneySavingExpert.com (MSE) newsletter, the founder of the hugely successful consumer website has shared his top tips to maximise your savings pot. Highlighting the current cost of living crisis and soaring inflation rates, Martin said that it’s “never been more important to maximise every penny of savings interest”.
For many of us, we think putting money into a savings account is a job well done and forget about it until it either matures or something pops up and we need the extra cash. But according to Martin and his team at MSE, we could be missing out on much better interest rates available right now - whatever the size of your savings pot.
Martin explained: “It's never been more important to maximise every penny of savings interest. With inflation roaring, in real terms money in savings is shrinking. To mitigate the impact, you need as high a rate as possible.”
And surprisingly, he pointed out that rates for the top deals are increasing, with some longer fixes closing in on 3%. However, he also highlighted that savings rates tend not to “bounce up” in the same way mortgage rates do and said that even after five base rate rises, some savings rates still pay 0.01% so everyone should “check what you get ASAP”.
Martin shared a handy list of savings need-to-knows which includes easy access savings which are a popular choice for people looking for flexibility and the ability to put money in and take it out when they want.
The guide highlights current deals from:
- Chase - 1.5% AER
- Virgin Money's M Plus - 1.56% AER
- Atom Bank - 1.35% AER
- Aldermore - 1.35% AER
Find out more details about the current top easy-access savings accounts on MSE.com here.
Martin also shared the current top fixed-rate savings accounts too, find out more here.
Another option many people on a low income is the Help to Save Scheme.
Help to Save
Earlier this month, Martin encouraged people claiming Universal Credit or Tax Credits to look into an “unbeatable” bonus scheme offered by the UK Government after a money-saver thanked the consumer champion on social media for sharing details about it.
The savings scheme offers people the opportunity to earn a maximum bonus of £1,200 over a four-year period, but how much you get back depends entirely on how much you put in each year as the 50% bonus is based on your highest total savings amount.
Below is everything you need to know about the scheme, but it’s also worth noting that you can open an account now without making a deposit.
What is Help to Save?
The Help to Save account is a scheme which millions of people on a low income, or claiming certain benefits, could be eligible to join.
It is a state-operated scheme that allows people entitled to Working Tax Credits or receiving Universal Credit to get a bonus of 50p for every £1 they save over a period of up to four years.
It is also possible to take the money out from the account, but there’s a catch - the bonus payout is based on the highest amount of money you put in.
Even if you’re not able to set aside money for savings at the moment, open an account anyway, while you are eligible to do so, because you don't have to put any money in.
How the Help to Save scheme works
The scheme allows certain people entitled to Working Tax Credit or receiving Universal Credit to get a bonus of 50p for every £1 they save over four years.
Help to Save is backed by the UK Government so all savings in the scheme are secure.
How payments work
You can save between £1 and £50 each calendar month - you don’t have to pay in every month.
Payments can be made by debit card, standing order or bank transfer.
You can pay in as many times as you like, but the most you can pay in each calendar month is £50.
You can only withdraw money from your Help to Save account to your bank account.
How bonuses work
You get bonuses at the end of the second and fourth years - these are based on how much you have saved.
What happens after four years?
Your Help to Save account will close four years after you open it. You will not be able to reopen it or open another Help to Save account.
You can close your account at any time. If you close your account early you will miss your next bonus and you will not be able to open another one.
Eligibility
You can open a Help to Save account if you are:
Receiving Working Tax Credit
Entitled to Working Tax Credit and receiving Child Tax Credit
Claiming Universal Credit and your household earned £604.56 or more from paid work in your last monthly assessment period
Getting payments as a couple. You and your partner can apply for your own Help to Save accounts - you need to apply separately
You also need to be living in the UK.
Will it affect my benefit payments?
You can continue to receive Tax Credits or Universal Credit while saving with Help to Save.
What happens if I stop claiming benefits?
You can keep using your Help to Save account.
For more information and to set up your Help to Save account, visit the GOV.UK website here.
To keep up to date with the latest savings news, join our Money Saving Scotland Facebook group here, follow Record Money on Twitter here, or subscribe to our twice weekly newsletter here.
