Insights from our recent savings webinar

Factors influencing positive savings experiences

Based on feedback from Smart Money People’s customer reviews, several factors consistently drive satisfaction among savers:

1. Simplicity – A key factor is how easily customers can manage their accounts, including interactions with customer support, account setup, and general processes.
2. Mobile app – Customers place a high value on how well a bank’s mobile app functions. This includes ease of use, stability, features like notifications, and overall reliability for managing finances.
3. Customer support – The quality of service provided, particularly how responsive, professional, and friendly staff are when assisting customers, plays a big role in customer satisfaction.
4. Security – Trust in the provider’s ability to safeguard personal data and finances is critical. Customers want to feel that their money is secure and that the provider has robust safety measures in place.
5. Product range – Consumers appreciate financial providers that offer a variety of savings options, from instant-access accounts to more complex products like stocks and shares ISAs, catering to diverse financial needs.
   Challenges and hurdles in the savings sector

Despite these positive drivers, several common issues continue to frustrate savers:

1. Fees – Maintenance fees, service charges, cancellation fees, and other associated costs can lead to dissatisfaction among customers.
2. Accessibility – Consumers often struggle with physical branch availability, limited customer service hours, or difficulty accessing their accounts over the phone or online.
3. Complaints – Frustrations arise when complaints aren’t addressed effectively or resolved in a timely manner.
4. Ethical factors  – More than ever, consumers expect transparency and ethical behaviour from their provider. 
5. Process complexity – Lengthy or complex procedures for opening accounts or getting applications approved are frequent sources of irritation.

The great savings switch

According to our research from April 2024, 88% of savers are considering switching to new providers to benefit from better interest rates or rewards. However, brand loyalty still influences decisions, with 31% of respondents preferring their current bank due to familiarity, and 17% feeling overwhelmed by the sheer number of available choices.

Amelia Murray, Deputy Editor at Be Clever With Your Cash, noted that while younger savers are often more tech-savvy, assumptions about their financial behaviour shouldn’t be made based solely on age. Security and reliability also matter to many in this age group, and these factors sometimes lead them to stick with their existing providers.

Generational differences

The webinar revealed generational contrasts in saving habits. Research from Forbes* shows that adults aged 25-34 typically have less in savings compared to those aged 45-55. However, Gen Z has shown growing interest in improving their financial literacy and learning how to manage their money better. Despite this eagerness, many young adults are hindered by factors such as high living costs, debt, and job instability.

Amelia pointed out that although Gen Z and millennials are more financially aware, they face intense financial pressure. Younger consumers are also more likely to use digital tools and automated features to help manage their savings.

Innovative approaches to boost savings

Throughout the discussion, the panellists highlighted several innovative strategies that could encourage more saving. James Blower from Zopa Bank described how they’ve introduced more flexible saving features and app-based goal tracking, helping users feel a sense of progress as they hit milestones.

Amelia suggested that further innovations could include reward-based incentives, like cashback or bonuses for consistent saving. These kinds of perks could motivate consumers to save more regularly, even if they can only contribute small amounts.

Importance of financial education

A recurring theme during the webinar was the need for better financial education to help encourage a culture of saving. The panel agreed that financial literacy should start at a young age, with good money habits forming as early as seven. Encouraging families and schools to talk openly about money could lead to healthier financial habits down the line.

James Blower also noted that while many people understand the basics of savings accounts, more complicated products like ISAs can be confusing. Simplifying these products could help consumers make better-informed decisions.

Looking ahead

Looking to the future, the panel discussed how government policies could further encourage savings. Expanding initiatives like Help to Save and reforming ISAs to make them more accessible were seen as positive steps. They also explored the idea of automatic savings enrolment schemes, similar to workplace pensions, which could help more people save consistently, even in smaller amounts.

Colin McDougall from Great Western Credit Union underscored the important role credit unions play in promoting savings and financial inclusion at the community level. Although not as widely known as banks, credit unions provide valuable, ethical services aligned with community-based savings goals.

Ultimately, the panel reminded attendees that while interest rates are important, factors like trust, service, and community engagement are just as crucial when it comes to choosing where to save.

Rewatch the entire webinar

*Average savings by age in the UK, September 2024