One in four Brits know more about pop culture than their savings accounts, according to a survey.
A poll of 2,000 adults found instead of confidently knowing the finer details of their savings, many of these could name the Premier League top scorer (39%) and films nominated for best picture at the Oscars.
Skipton Building Society teamed up with Bread Ahead bakery to offer free ISA buns[/caption]
The initiative took place on Thursday in London[/caption]
While others could easily list Taylor Swift albums (22%) and name the actors who’ve played Doctor Who in recent years (22%).
Some even know more about last year’s Christmas number one (21%) and the winners of The Traitors in January (19%) than how their savings are performing.
As a result, 44% admit they are in desperate need of getting on top of their finances with a ‘financial spring clean.’
A third of these have no idea if they’re getting good interest rates on their savings, and 20% have multiple accounts they struggle to keep track of.
What is an ISA?
SAVERS can put away £20,000 a year into individual savings accounts, also known as ISAs, and any income or gains you make from them are shielded from tax.
This is different to regular savings accounts, where you are taxed on income earned from interest once you breach a certain limit – known as the personal savings allowance (PSA).
Basic rate taxpayers have a PSA of £1,000 while higher rate taxpayers get £500.
Anyone who is an additional rate taxpayer (taxed at 45%) has to pay tax on any interest they earn and gets no allowance at all.
You can split your £20,000 ISA limit between multiple ISAs, whether that’s a cash or stocks and shares ISA (we explain the different types below).
You don’t have to save the full £20,000 a year either.
There are several different types of accounts:
- Cash ISAs: A savings account where interest is earned tax-free. Suitable for risk-averse savers.
- Stocks and Shares ISAs: Invest in shares, bonds, and funds with potential for higher returns, but also higher risk. Gains are tax-free.
- Lifetime ISAs: Save up to £4,000 a year towards your first home or retirement, with a 25% government bonus on contributions.
- Junior ISAs: Tax-free savings accounts for children under 18. Available as cash or stocks and shares ISAs, with a yearly contribution limit.
- Innovative Finance ISAs (IFISAs): Invest in peer-to-peer lending with tax-free interest. Higher risk but potential for higher returns.
To help Brits take the first step and celebrate ISA season, Skipton Building Society ,which commissioned the survey, has teamed up with Bread Ahead bakery to give away free ISA buns – a sweet incentive to kick-start their financial spring clean.
Customers in droves raced to the store to claim their free bun[/caption]
The collaboration saw 1,000 iced buns served[/caption]
The collaboration saw 1,000 iced buns served in London on Thursday, encouraging savers to make the most of ISA season – with advisors from the building society on hand to talk about the importance of spring cleaning your savings and how to make the most of your money.
Financial influencer Abigail Foster said: “It’s so easy to ignore our savings because life gets in the way, but that could mean missing out on better interest rates and tax-free perks.
“ISA season is the perfect time for a quick financial spring clean.
“A lot of people don’t realise you can transfer ISAs or consolidate old accounts to make them easier to manage and potentially earn more.
“It’s worth checking what you’ve got and making sure your money is working as hard as possible for you.”
The research also found that savings (52%) are the area most in need of a financial spring clean, followed by budgets (32%) and bills (31%).
But 23% haven’t given their cash a spring clean in over a year.
One in three (32%) would be motivated to take action to see how much harder they could make their money work for them, and 27 per cent would do so if there was a financial incentive involved.
While 23% want to do so to feel more in control of their finances.
However, 16% have been reluctant to take action because they assume their money is already in the right place.
When it comes to ISAs, 39% have more than one account – including Cash ISAs (75%), Stocks and Shares ISAs (39%), and Lifetime ISAs (17%).
While 24% check these accounts a few times a year to ensure they’re getting the best rates, 25% have never actually moved their money from one ISA to another to earn more interest.
A quarter prefer to leave their money where it is for convenience, and 23% are reluctant to move their savings because they don’t believe it will make much of a difference.
While 32% didn’t realise these accounts could be transferred, but doing so can help make them more manageable and might earn more interest.
In fact, one in 10 of those polled, via OnePoll, admitted to having completely lost track of previous savings accounts.
But 72% subsequently did mange to locate these, finding an average of £125 still saved for their troubles.
Alex Sitaras, head of savings and partnership products at Skipton Building Society, said: “While many Brits recognise their savings need a spring clean, it’s clear that many don’t fully understand how simple steps, like reviewing and consolidating accounts, can make a significant difference.
“The fact that so many believe their money is already in the right place shows how easy it is to become complacent.
“That’s why we’re celebrating ISA season and getting people talking about how to make the most of their tax-free savings.
“This opportunity to give your savings that ‘tax-free feeling’ by reviewing your options and transferring from outdated rates.”
How do I find the best savings rates?
WITH your current savings rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Research price comparison websites such as MoneyFactsCompare.co.uk and MoneySupermarket.
These will help you save you time and show you the best rates available.
They also let you tailor your searches to an account type that suits you.
As a benchmark, you’ll want to consider any account that currently pays more interest than the current level of inflation – 2%.
It’s always wise to have some money stashed inside an easy-access savings account to ensure you have quick access to cash to deal with any emergencies like a boiler repair, for example.
If you’re saving for a long-term goal, then consider locking some of your savings inside a fixed bond, as these usually come with the highest savings rates.
