New research from online money management tool Moneyhub has found that UK savers are becoming even more ‘savvy’, spreading their savings across several accounts to boost returns.
Moneyhub analysis reveals that the average user now saves into three different accounts- often with a number of different providers. This compares to three years ago when savers were putting their money into two accounts.
This multi-bank approach is a relatively new phenomenon, with individuals shopping around and banking with multiple providers rather than just staying with the same lender.
As the number of providers and therefore competition in the banking industry has increased, customers are becoming more ‘savvy’ and much more likely to save with multiple providers.
The low interest rate environment has also meant that savers are increasingly shopping around to secure the best deals and make their money work harder. Often this won’t just include a competitive rate of interest such as those offered by Goldman Sachs’ Marcus or Kent Reliance but may also include monetary awards for switching or opening an account which can prove lucrative.
Moneyhub found that the average amount held in a UK savings account was £6,113. However, the majority of individuals are still predominately saving via their main savings account. Indeed, the average amount saved into a high street bank saving account was higher (£5,828) compared to a challenger bank (£2,503).
The introduction of Open Banking has helped to fuel these trends, as bank customers can now better view all the financial information in one place and can therefore keep track of multiple accounts.
Samantha Seaton, CEO of Moneyhub comments: “UK savers are becoming more financially savvy. A trend we expect to continue. The heady mix of increased competition and low interest rates is encouraging more and more people to build their savings pots for the future. With younger generations facing more challenges financially than the generations before them, a further increase in engagement with finances can only be expected.
“For those with multiple savings and current accounts it can be difficult to lose track of all the different pots. Thanks to the implementation of Open Banking, however, savers can now view all their finances in one place on a platform such as Moneyhub,” she added.
“By having greater control over their finances, enabling smart nudges to prompt better saving, and developing better money habits, UK savers can vastly improve their long-term financial health.”