Green shoots for savers
9 February 2022 • Our Insights
Review of the 2021 savings market and what 2022 may offer for savers
2021 started a little unpredictably and didn’t look too promising for savers. With Covid-19 still impacting the savings market we weren’t sure what the future might look like for savings products and interest rates but, as we moved into May 2021 green shoots started to appear as saving accounts began to bloom again and rates slowly began to rise.
At The Cambridge we began to offer new products and in October we launched two member-exclusive Reward Regular Saver accounts – one of which is market leading and has featured on Money Saving Expert and in the Daily Express. These regular savers accounts have proved very popular, with over 2,000 members opening accounts across the range since launch. Find out more about our Regular Saver accounts here.
Factors, including the rising price of energy and the Covid-19 pandemic have contributed to the rising rate of inflation in the UK. In a bid to try and control this, The Bank of England announced an increase to base rate from 0.10% to 0.25% in December 2021, the first increase since August 2018. We increased the interest rates on all of our variable rate savings accounts on 25th January 2022.
Looking ahead at 2022
On 3rd February the Bank of England announced a second increase in the base rate, increasing it from 0.25% to 0.50%. We’re currently reviewing our variable interest rates and we’ll communicate any changes to our members, as soon as we know more detail.
The Bank of England is expecting inflation to exceed 7% this spring so, it’s likely there’ll be further base rate rises throughout 2022 in a bid to limit its impact. With this in mind, it’s been reported that savers might need to find an extra £1,100 to add to their savings to deal with the rising costs of living.*
ISA season is fast approaching (April) and we’re currently reviewing our ISA rates and criteria ready for launch. There’s no announcement from the Government yet about any changes to the ISA allowance (currently £20,000) for 2022/2023 tax year. But keep your eyes peeled for more updates leading up to the new tax year.
So while you wait for the rate of inflation to come down, why not consider opening one of our Reward Regular Saver accounts? We’re hoping to keep this product available to our members for a little while longer, so if you haven’t already, we hope you can take advantage of this market leading product.
Recently there has been a much greater emphasis on the green agenda and consumers are more interested than ever in how companies can make a positive impact on the environment, and financial services are no exception. As well as considering how to become more energy efficient and less wasteful with resources, financial service providers are considering how they can evolve their products and services to make a positive impact on the environment. Whether it’s using deposits to fund sustainable transport and mobility projects or using the funds raised from a green savings bond to help environmentally-focused projects get off the ground or planting a tree for every fixed rate savings account opened, there are ways to help towards the Green Initiative and contribute to the Government's efforts to hit net-zero carbon emissions by 2050. This is something we are keen to learn more about in 2022 and develop products for our customers that have a positive environmental impact.
Children are our future
No one knows what the future looks like, who could have predicted 2020 and 2021?
That’s why we’re investing in our young savers, helping them plan for the future and what it may include. Whether it’s saving for their first car, travelling the world or going to University, our relaunched and rate increased, 3 Year Fixed Rate Children’s bond or our First Account could help give your child the financial head start they need.
Managing your savings anywhere, anytime and anyhow
Digital banking will continue to be a key driver for consumer finances, as everyone leads a busy life, so a savings account with choice and flexibility in how you manage it can really make a difference. Our variable rate, Your Saver account allows you to save for the things that matter most in life, however big or small, in a way that suits you. Whether it’s face-to-face, over the phone, online or via the app, you can manage Your Saver however you like, at your convenience. If you wish to manage your account online to move money and check your balance out of hours, you can by logging into your account via our app or website. Find out more about Your Saver accounts here or call our team on 0345 601 3344.
Our ambition is to continue supporting our savers in 2022 – keep your eyes peeled for more member exclusives coming this year.
* (Information sourced from telegraph.co.uk, February 2022)