The coronavirus pandemic has triggered a ‘significant rise’ in the demand for savings solutions, reveals an independent financial advisory organisation.
With millions of people facing financial strains, whether from losing income or seeing their retirement savings plunge, the deVere Group reports a jump of 28 per cent in enquiries about savings plans in March.
deVere Group CEO and founder Nigel Green notes:
“The financial impact of coronavirus has driven home that the ‘living for today’ attitude is great, but what happens when tomorrow does come? Are you still able to fulfil your obligations? Are you still able to do the things you love with your friends and family? Are you able to maintain your lifestyle?”
“The crisis will, again, underscore that we’re increasingly living in an era of personal financial responsibility.”
Accessing fixed-term savings accounts
Banks and building societies are putting in place special measures to help customers deal with financial stress during the coronavirus pandemic. Notably, many banks have relaxed their rules on accessing the money in fixed savings accounts to help people with their cash flow during the crisis.
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Traditionally, there are some accounts that don’t allow instant access to your savings, and some that only offer limited withdrawals.
A number of banks are now making it easier for customers to access their funds in fixed-term savings accounts.
For example, Nationwide and HSBC allow their customers to access their fixed-term savings accounts without penalty. At Barclays and First Direct, customers can even close their fixed savings accounts with no charge.
Similar facilities are provided to customers at the Lloyds Banking Group (including Bank of Scotland, Halifax and Lloyds Bank).
Worrying about safety
Barclays’ message to its customers is typical of many banks’:
“If you find yourself in financial difficulty because of COVID-19, and some or all of your savings are tied up in a limited access account, we’ll see how we can help. This might be by giving you early access to your money, or waiving charges, if appropriate.”
Meanwhile, the ongoing volatility has many people worrying, scrambling to find safe havens for their money and questioning whether the financial system is secure.
The safety of a customer’s cash savings will depend on whether the provider is covered by the Financial Services Compensation Scheme (FSCS). This covers the majority of major banks and guarantees funds up to the value of £85,000 if the provider fails.