This year proved how important a savings safety net is. If your New Year resolution is to save better, there are plenty of apps to help you do so without thinking.
Plum and Chip analyse your spending to calculate potential savings.
Some round up payments to the nearest pound and stash away the difference. So if you buy something for £4.50, the app will round the spend up to £5 and put away 50p.
Savvy saving: Autosaving apps, such as Plum and Chip, link up to your current account and analyse your bills and spending to calculate how much you can squirrel away
Others look at your spending habits and suggest how much you can save. You can pause the savings plan or move money back into your current account as needed.
Money Dashboard, which has 600,000 users, has set up a ‘Couch to £5k’ challenge — a free financial fitness programme to help you set up realistic and achievable goals.
Steve Tigar, chief executive at Money Dashboard, says: ‘The economic shock of Covid-19 has amplified the need for more planned savings particularly among the under-40s. Record levels of redundancies and the uncertainty of 2021 have driven home the message that a financial safety net and workable goals need to be put in place.’
Plum, which has one million registered users, has set up three savings challenges. Its 52-week challenge means putting away £1 in your first week and then increasing it by £1 a week for the rest of the year. You’ll make £1,378 this way.
With its Rainy Days Rule you save up to £20 on days it rains in your area.
Jess Williams, savings expert at Plum, says: ‘The idea of the weather controlling how much you save sounds a bit crazy.
But it is effective.’ You won’t know how much you will put away but, for example, Londoners stashing £20 on rainy days last year would have saved £2,120.
Chip looks at what you have spent every few days, compares it with your usual habits and lets you put away the difference. It’s Chip+1 account is free while you save your first £100. Then it’s £1.50 a month but gives access to a savings account paying 1.25 pc.
Once you have a feel for saving, you could open a regular savings account which pays higher interest rates.
Check how your money is protected under the Financial Services Compensation Scheme if the app or bank with your savings ends up going bust. You do not always get the same cover as with a traditional bank.
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