The cost of living crisis shows how vital it is to have savings says the region’s largest building society.
The Cumberland Building Society is using Savings Week, which starts today, to urge every household to look at how much they have set aside for emergencies and how much interest their savings earn.
Research by the Building Societies’ Association reveals that one-in-seven of us have no savings while many of those that do aren’t earning any interest.
Chris Cairns, head of products at the Cumberland, said: “The COVID pandemic and the sharp rise in cost of living underlines how important it is to have savings to fall back on when the unexpected happens. Nobody knows what’s coming next.”
Although the rise in costs is making it harder to save, the association’s research shows that two-thirds of people with no savings could afford to save something – even if it is only £10 a month.
Chris said: “Ideally, we’d all have an emergency fund equal to at least one month’s outgoings, but anything is better nothing. A safety net provides peace of mind.”
The research suggests that the average saver has £17,000 put away, yet many aren’t earning interest on their nest egg. Nationally, £260 billion is sitting in accounts that don’t pay interest.
Chris added: “It makes sense to have your savings work for you. Too many people have savings languishing in accounts earning no or little interest.”
Unlike banks, which need to make profits to pay to their shareholders, the Cumberland is a mutual organisation that acts solely in the interests of its members – the savers and borrowers.
Chris said: “We talk about ‘kinder banking’. We don’t try to hook savers with incentive rates that end after a few months, we look to reward customers for their loyalty and will apply the same interest rate or more to our existing variable rate savings accounts to that offered on the equivalent product to our new customers.”
