Why should I keep saving money?

This is probably something that no doubt crosses your mind fairly regularly! 

If you have either opened a savings plan for yourself, or your child or grandchild, you have already taken a very important step in helping to secure your, or their, financial future.

However, whilst opening a savings plan is a very important first step, actually continuing to save regularly should now be the priority.

That goal of buying a house, a dream holiday, an extension, a wedding, a nest egg for a child or grandchild etc will only happen with a consistent saving habit. That £50 a month you put into a cash ISA but then the following month slowly transfer it back over for spending money isn’t going to get you there (we’ve all been that type of saver!). 

That’s why saving with Foresters can help for the mid-long term.

Don’t lose that all important focus
Since March 2020, the UK population’s view on money and savings has no doubt had a reality check.  Fears of reduced income from the furlough scheme, or the threat of job losses, for some will have been difficult to bear.  Research conducted in November 2020 by the Money and Pensions Service, found that over half (60%) of those surveyed said the pandemic had added to their financial concerns.

With the pandemic now hopefully becoming a distant memory, these situations may have made you consider your savings pot more carefully to ensure that you are covered should you ever fall on difficult financial times again – whatever the reason.

On the flip side, whilst it was reassuring to see that those who were more financially secure during the pandemic were able to increase their savings habits by putting more money aside, we now need to be mindful that with lockdown restrictions hopefully about to become a distant memory, we do not switch back to old habits.  Instead, make sure you continue to build up that financial cushion!

Will savers become spenders as restrictions ease?
A Yougov survey carried out in 2021, found that among people whose savings had increased since March 2020:

  • a fifth (19%) hope to save even more in ‘normal’ times
  • many (44%) still hope to save more than before the pandemic.

For those who had to dip into their savings during the pandemic, 34% are keen to save more once the restrictions are gone.

This is positive news and means that, for the majority, these new, or increased, savings habits should remain in place.

What about other considerations?
As well as restrictions lifting making spending easier to do, there may be other pressures on your household income. Concern with gas and electricity prices may eat into your available income. 

It is important to remember that even if you are not able to save the larger sums you could during the lockdown, saving little and often is just as important. 

Savings plans such as the ISA, Junior ISA and Lifetime ISA allow you to pay in either lump sums or regular amounts by a monthly direct debit, so why not set up an affordable monthly payment into your plan just after pay day and give yourself the opportunity to continue to save for the future.

Making sure your savings work hard
During 2020 and 2021, here at Foresters Friendly Society we have seen a significant increase in new members joining us to place their hard earned money into savings plans for the mid-long term at the same time as existing members paying more into their savings plans.

The plans we provide at Foresters pool savers’ money in a with-profits fund which invests in a variety of assets for the mid-longer term with the aim of providing a higher potential return than their cash-equivalents, like Cash ISAs.  This is another important consideration with record inflation levels currently at play.  Inflation essentially means that your money won’t have the spending power it does today in the future unless its saving return is able to compete with the inflation rate.

But, what if I have to dip into my savings?

Should you fall on hard times, or just have a spell when you need a bit more money for the day to day costs of living, then this is where your more accessible cash savings pot can come in handy.  You might want to consider taking some money from Cash ISAs or bank accounts, if that still leaves money in rainy day funds, rather than to realise losses from any investments you hold.

However, if you are saving with Foresters, we may be able to provide financial assistance in other ways.  Each year we support our members with over £1million in the form of discretionary grants.  These grants can assist during times of hardship such as loss of income, or to help cover large, unexpected bills that may place financial pressure on households, as well as helping to provide some financial assistance for things like a trip to the dentist or opticians.

With savings plans like Junior ISAs, Stocks & Shares ISAs and Lifetime ISA, saving is flexible so you can pay in when you like (up to the annual limits) and stop and start regular savings as needed.  With our other regular savings plans, we can support with contribution breaks if needed with the contributions being paid when your finances permit (conditions apply).

Just give us a call for details on the full ways we can help you, should you ever need it. 

Save, spend, save again with Foresters
As we return to a new ‘normal’ which is likely to include a switch to more regular home working and the associated financial benefits it can bring, more spending on luxuries and socialising, it will be wise for savers to continue to build a financial cushion to ensure they have future security should it be needed.