By Jess Rushton: Head of Business Development, Smart Money People

In the latest ‘Smart Talk’ webinar, I had the pleasure of hosting industry experts from Be Clever With Your Cash, Zopa Bank and Great Western Credit Union to dive deep into the latest trends in the UK savings market and how consumers are engaging with savings products.

Key themes driving positive savings sentiment

According to data from Smart Money People’s reviews, positive customer feedback consistently highlighted several key factors:

1. Ease – A primary driver of satisfaction is how easily customers can manage their accounts, including contacting customer service, processes, and setting up and account etc.

2. Mobile app experience – The overall usability, stability, and features of the financial institution's mobile app. This includes the functionality of notifications, updates, and user-friendly design, as well as the app's reliability in performing financial tasks.

3. Customer service – The quality and efficiency of interactions between the customer and the financial institution's staff, for example their responsiveness, friendliness, and professionalism.

4. Security – Safeguards and protocols to protect consumer information, data and funds. How reliable, credible and trustworthy the institution is, and that you feel your money is safe. 

5. Product variety – Customers value financial institutions that offer a broad range of savings products, from easy-access accounts to stocks and shares ISAs, giving them options that match their financial goals.

Frustrations and barriers to saving

Despite these positive trends, there are ongoing challenges. Consumers frequently cite several reasons for dissatisfaction:

1. Account fees – The costs and fees associated with maintaining and using financial products, including app fees, charges, cancellation fees and overdraft fees. It includes any fees for account-related services.

2. Access Issues – Availability and convenience of physical branch locations, customer service staff, and account access. It covers how well you can access all things relating to your account and the institution, including via the phone.

3. Complaint Handling – Issues and dissatisfaction expressed by customers regarding financial products or services, including the process and resolution of such grievances.

4. Ethics and Trust – Ethical behaviour is becoming more important, particularly for younger generations. Financial institutions that are transparent and socially responsible stand a better chance of retaining these customers.

5. Process – Including aspects such as the steps, speed and criteria for getting applications approved, and opening an account.

The great savings switch

Smart Money People’s research suggests that 88% of savers are considering switching providers in search of better interest rates, rewards, or benefits. However, loyalty plays a role in why many stay put. About 31% of respondents stated that they prefer the familiarity of their current provider, while 17% feel overwhelmed by the sheer number of options available.

Amelia Murray, Deputy Editor of Be Clever With Your Cash (Smart Money People’s sister site), emphasised that while younger generations are often more tech-savvy, it’s important not to make sweeping assumptions about age groups. Many young people are motivated by security and reliability, which sometimes means sticking with what they know.

Generational differences in savings behaviour

The webinar highlighted significant generational divides in savings habits. Research by Forbes suggests that younger adults (25-34) have significantly less savings than older adults (45-55). Yet, Gen Z is increasingly interested in financial literacy and motivated to learn how to manage their money. Despite their enthusiasm, many younger adults are held back by the high cost of living, debt, and insecure employment.

Amelia discussed the unique struggles of Gen Z and millennials, noting that although they may be more financially aware, they’re also under the most pressure. However, younger savers are also more likely to favour digital tools and automation to help them manage their finances.

Innovative solutions to encourage saving

Throughout the discussion, panellists shared innovative strategies that could help encourage saving. James Blower from Zopa Bank highlighted how they’ve introduced flexible features allowing customers to save in a less rigid manner, and app-based goal tracking to give users a sense of achievement as they reach their targets.

Amelia also pointed out the potential for further innovation, suggesting that financial institutions could look to incentive-based rewards, such as offering cashback or bonuses for regular savings habits. Such incentives could provide the motivation people need to start saving, even if it’s a relatively small amount.

The role of financial education

One of the most pressing issues discussed was the need for better financial education to get more people saving. The webinar stressed that financial education needs to start young, with habits forming as early as seven years old. Encouraging positive discussions about money in the home and in schools is crucial to developing good financial practices.

James Blower also pointed out that, while many savers understand the basics of savings accounts, more complex products likes ISAs can cause confusion. Simplifying certain savings products would make it easier for consumers to make informed decisions.

Looking Ahead: policy changes and future trends

As for future trends, the panel agreed that government policy could play a critical role in promoting savings. They discussed the potential benefits of expanding programs like Help to Save and reforming ISAs to make them more accessible and easier to understand. Additionally, auto-enrolment schemes, similar to workplace pensions, could encourage more people to start saving regularly, even in small amounts.

Colin McDougall from Great Western Credit Union emphasised the role of credit unions in supporting community-based savings and financial inclusion. While credit unions are not always well-known, they provide valuable services that align with ethical and community-focused savings goals.

Overall, it was an incredibly insightful hour, with the panel sharing valuable insights. They left us with a crucial reminder. While interest rates matter, so do trust, service, and community.

Click here to rewatch the webinar in full.