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VICTORIA BISCHOFF: Don’t abandon saving, everyone needs a fund

victoria-bischoff:-don’t-abandon-saving,-everyone-needs-a-fund

VICTORIA BISCHOFF: Don’t abandon saving – everyone needs a rainy-day fund to cover those unexpected bills

By Victoria Bischoff for the Daily Mail

Published: | Updated:

What is the point of saving? That’s the question posed on the front page of this paper yesterday, after it emerged that National Savings and Investments (NS&I) is to slash interest rates for millions of savers from May.

It is estimated that this latest round of cuts by NS&I will cost savers at least £234 million a year. And for some it will be one bitter blow too many.

On easy-access accounts alone, savers have already suffered more than 1,000 rate cuts since the base rate was raised to 0.75 per cent back in August 2018.

Rate cuts: It is estimated that the latest round of cuts by NS&I will cost savers at least £234 million a year. And for some it will be one bitter blow too many

And experts are now warning that this year’s Isa season will be a flop, with cash Isa rates at their lowest level in almost three years.

Is it any wonder that so many of the nation’s downtrodden savers are starting to wonder if there is any point putting money aside?

And I sympathise. Over the past few months, First Direct has pulled my favourite regular saver paying 5 per cent, Marcus has cut my previously top easy-access rate, and now my chances of winning a Premium Bond prize have gone from slim to, well, slimmer.

But regardless of what happens to rates, it is absolutely vital we do not give up on saving.

Everyone needs a rainy-day fund to cover those unexpected bills, such as having to buy four new tyres for your car, as in my case this month.

Without this pot of money, you’ll be forced to turn to expensive credit cards, loans and overdrafts, which will only exasperate the financial blow.

Britain is already facing a personal debt crisis — only last week we revealed how a new instant credit craze is landing young shoppers with bags of debt.

The new Chancellor, Rishi Sunak, must do something in the next Budget to lure the public back into the savings habit.

It has been eight years since Money Mail launched its campaign to Get Britain Saving Again. 

We exposed how consecutive governments, along with the Bank of England, High Street banks and building societies had stripped away incentives to save.

Last year, we launched our Stop Short-Changing Savers campaign, calling on banks to end derisory returns for loyal customers.

And while we have had some victories — the latest in January, when the Financial Conduct Authority laid out plans to force providers to pay a blanket interest rate to long-standing customers — more needs to be done. Over to you, Chancellor Sunak.

Budget wish

While I’m compiling my wish list for the new Chancellor, I would very much like to see him include a guarantee to protect cash long-term in his first Budget.

A series of industry-led initiatives has been launched to help communities in danger of losing bank branches and ATMs, such as shops offering cashback.

Their arrival follows a major review this time last year, which exposed how Britain is in very real danger of sleepwalking into a cashless society.

But they are not a substitute for proper legislation that will ensure many communities are not cut off in the future.

We saw only recently how quick Barclays was to suddenly bar customers withdrawing cash from post offices. 

The bank has now done a U-turn, but that’s not to say others won’t sneak in similar changes down the line.

Bag that freebie

We receive endless complaints from readers who, to take advantage of a special offer, have signed up for something online, but then never get the promised free gift.

Well, Money Mail reader Andrew in Manchester has a great tip to help you fight your corner.

He says: ‘Whenever I make a transaction online, I save a screenshot before hitting ‘submit’, as well as a screenshot of any offers and terms. It only takes a few seconds, and then I can check back if something goes wrong.

‘The process is simple. Before hitting submit, press ‘print screen’ (usually to the right of the F12 key), open a Word document or email, put the cursor in the document, right click and select ‘paste’. Then save the document somewhere you can find it again.’

A very sensible idea.

v.bischoff@dailymail.co.uk

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