The yearly event lasts until Sunday 15 September, with the goal being to open up savers’ eyes to the best way to maximise their cash.
It was launched in 2022 by the Building Societies Association and focuses less on the leading accounts on the market and more on the methods and mindsets to help you save up.
As part of the week, firms across the industry join forces to provide analysis of how the UK is saving and, on average, Brits are putting away £300 every month, according to Shepherd’s Friendly.
Younger people aged 18-24 are stashing away even more, saving £410 on average every month – £100 more than those aged between 45 and 54.
Men are more likely to top up their ISA pot, with almost £400 added each month compared to the £260 that women deposit, the mutual’s survey of 2,000 adults found.
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London ranked as the city with the most savings, as residents in the capital save an average of £550 per month.
Brits add £1.5bn to ISAs in just two months
Over the last two months alone, Brits have deposited £16.5bn into cash ISAs, but there is still a quarter of the UK’s population who say they are not saving anything at all.
Derence Lee, chief finance officer at Shepherds Friendly, said: “Saving money can be a challenge for many of us, particularly due to increases in the cost of living. Using ISAs to your advantage can be a great way of building savings in the long term.”
Lee also provided three methods to help you maximise your funds:
1. Explore stocks and shares ISAs
For those looking to potentially earn higher returns in the future, a stocks and shares ISA can be a useful tool. Unlike cash ISAs, these invest in a variety of assets such as stocks, bonds, and mutual funds. Returns are tax-free and these investments often offer greater growth potential than cash over the long term. That being said, like with any investment, the value can fluctuate and, in some instances, it is possible to get back less than what you put in.
2. Use round-up savings tools
A painless way to save small amounts that add up over time is to use round-up savings tools. Many banks and financial apps offer round-up features that automatically round up your purchases to the nearest pound and transfer the difference to your savings account or ISA.
3. Combine different ISAs
You can split your annual ISA allowance between different types of ISAs. For example, you might put some money in a cash ISA for security and easy access, and the rest in a stocks and shares ISA for potential growth over a longer period of time.
Savers struggle to switch
While those figures suggest a promising picture for people making the most of their ISA, the interest rates of the accounts used are often not as lucrative as they could be, a separate study from Flagstone revealed.
Almost two-thirds (62%) of savers haven’t moved their cash to a new savings account with a different bank within the last 12 months.
A similar number (58%) keep their savings account with the same provider as their current account, meaning many account holders with big banks will be losing out thanks to floundering rates.
Meanwhile, even high earners with a household income of £100,000 or more only have one savings account or none at all.
This is even more pronounced for households earning a combined income of between £80,000 and £100,000, with a third (30%) either without an ISA or with just one account.
On average, a UK adult has saved between £1,000 and £5,000, stored in a range of two to five savings accounts.
‘Troubling mass-market situation’
Claire Jones, head of strategic relationships at Flagstone, says the reluctance of many savers to switch accounts “points to a troubling mass-market situation”. However, she added that the results “should be looked through the lens of the current economic context”.
Jones said: “Many people – even those on higher incomes – simply do not have enough left to save at the end of each month.
“Despite efforts by banks and the regulator to make moving savings between banks more attractive and convenient than ever, simply not enough savers are motivated to seek better terms and rates to grow their hard-earned savings.”
She added: “Saver inertia is a real phenomenon that risks damaging our market. Banks are already fulfilling the requirements expected of them to promote better rates to their customers and provide the mechanisms needed to make switching accounts easy and quick, and yet still half of UK adults simply don’t move.
“Economics works best when supply and demand are fairly matched. If customers don’t demand savings options, how do we guarantee that banks remain incentivised to offer competitive rates?”
