Friday, 1 May 2020

Frugal Lockdown Friday part 6...

One thing that any of us with any savings are experiencing at the moment is the annoying factor of rapidly dropping interest rates. with the base rate being reduced twice at the start of the pandemic to help support the economy, and realistically little prospect of it going up again any time soon, our doormat has been receiving repeated letters about the rates dropping on our assorted savings "pots", and the icing on the cake (not!) was the contact from the provider of our main long term savings account confirming that the rate on that will be halving next month. To add insult to injury even our regular saver accounts are having their rates cut!

In order to minimise the impact as much as possible I started looking around to see what options there might be for us - not wanting to lock the long term savings away always limits us a bit, as inevitably 2 or 3 year fixes are always going to give better returns - that doesn't suit us though so we were looking for instant access. As always the Money Saving Expert site was the first point of reference - and I was specifically looking to see what they were currently saying about the "Marcus" account that has been one of their savings recommendations for a while now. Initially it didn't work for us as wouldn't allow joint account holders, but that has now changed. Not only was it still on the list, but Martin Lewis was also saying that he didn't expect to see the rate there drop as far as many other banks and building societies, so that helped with the decision - and our short term "emergency fund" savings have now been transferred to a newly opened account there. I also opened a second account just in my own name to take my personal long term savings - rescuing it from an account laughably called a "loyalty saver" but not now seeming to do much to reward that loyalty!

There is little we can do about the falling rate on the regular saver - and in real terms it is still more than we would get in most other places, so instead I turned my attention to what other options there were out there for those from other providers, specifically looking for something that could be opened independently - without needing a linked current account with the same provider. I didn't expect to find much, but did find one small loophole that I had previously failed to spot. A small building society in this area of the country offering a regular saver account limited to a small sum each month, paying a whopping 4% interest. I'd previously dismissed it as needing to be opened in branch - with our nearest branch being 12 miles away - however a closer look revealed that it can be opened online but only by those in the society's area - and that 12 miles, while too far away to be practical to travel for paying in etc, turns out to mean that we are in the area that they accept. My newly opened "small saver" will only find a home for £50 a month, but better to have that £50 a month earning 4% there than 0.01%  elsewhere!  If you have a local-ish building society that might offer something similar this could well be worth a look.

Over this weekend we plan to do a bit more plotting and planning - we have a couple of other currently unused accounts, and it might be that we do some switching around of things like our holiday savings - not looking like being used any time soon sadly. The account we use to fund odd weekends away,and things like trips to Lundy is also currently looking rather more healthy than we were expecting at this time of the year, so again we might try to see where the contents of that will relocate to. The account I save into through the year to pay for airshow tickets and accommodation will also need some consideration. You always need some fairly solid reasons to use loyalty as an excuse for staying with a financial provider, but right now more than ever, and while our current accounts will probably be staying right where they are at the moment, the same is definitely not going to be true of saving, and ultimately whatever amount you have saved, it might as well be where it will earn you the most interest, even if "most" is currently rather subjective!

This week might also be a good time to cast a general eye over your finances to see if there is still anything you are due refunds for cancellation of due to the Covid-19 crisis. Our final one for the time being landed back on the credit card last week when the Lundy Ferry tickets were refunded. We might yet also have some money to claim back for our planned Hebrides trip as well - but at the moment that one is still hanging in the balance. The cottage deposit will simply roll straight over to next year's booking, but we will have ferry tickets to get refunded, and also a couple of other odd nights of accommodation too, although those may prove more of a challenge to get refunds on - we will see!


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