News

Multiple Cash ISAs don’t add up for savers

24 May 2018
  • One in five over-55s have five or more Cash ISAs but half don’t know how much they have saved
  • Charter Savings Bank’s Mix & Match ISA enables customers to open as many Cash ISAs as they want within one wrapper

New research from Charter Savings Bank reveals multiple Cash ISAs are not adding up for savers, who are risking leaving their money to stagnate in low interest rate paying accounts.

Its study found one in five (19%) of savers aged 55 plus have five or more Cash ISA accounts, but less than half (48%) know exactly how much is in these accounts and actively check and manage their savings. Women over 55 are more aware of the amount they have in savings than men (54% compared to 44%).

The amount of money sitting in low interest rate paying accounts is substantial. A fifth (20%) of those who don’t know how much is in their Cash ISA accounts, estimate that they have between £10,000 and £30,000 sitting in them. An average of one in seven (15%) estimate that they have more than £30,000 in inactive accounts, of which 18% are women compared to 13% of men.

Over a third (36%) of those who have opened more than one ISA, did so because they had different rates. For others, however, the number of ISAs they hold has increased because they’ve opted to open a new account each tax year.

Charter Savings Bank is offering more choice with its Mix & Match ISA, enabling savers to open as many different types of Cash ISAs as they want within one wrapper, and is using the industry’s eISA system to ensure most savers switching providers will benefit from a fast transfer.

Reasons for holding multiple Cash ISAs

Reason Over-55s with multiple ISAs for this reason

ISAs have different rates

36%

The number has built up as I have tended to choose to open a new ISA account for each new Tax Year

27%

ISAs have different product features

26%

I forgot I had some

5%

Too complicated to transfer them to one provider

2%

One of the reasons savers over the age of 55 do not have multiple ISAs, is because it can be difficult and frustrating managing multiple accounts with different providers. Nearly three in ten (28%) find it annoying managing different rates, while a similar number find managing multiple fixed-term maturities frustrating.

Around a quarter (24%) do not like managing the administration side of multiple accounts and remembering various log in information, while two in five struggles to remember bonus expiry dates (22%) and different notice periods (21%).

Charter Savings Bank’s research found 59% of savers would like the option to split their savings across a range of different accounts to suit their needs.

Paul Whitlock, Director of Savings, Charter Savings Bank says: “It can be easy for savers to lose track of accounts once they’ve been opened, and the longer they’ve been open the more likely it is that something might have changed. Savers could be missing out on better returns if they forget about their accounts. 

“With ISA allowances increasing over the years, it’s possible for savers to have substantial deposits in them so it makes sense to take action. It’s easier than ever to transfer Cash ISAs and so it makes sense to make the most of the simplicity to bag a better rate.

“Our Mix & Match ISA enables customers to split their allowance among different types of accounts so they can fix the rate on some of their ISA allowance while leaving the rest in easy access, all with highly competitive rates.”

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Saving priorities switch as we hit ‘peak stuff’

23 May 2018
  • 74% of savers putting money aside for memorable experiences
  • The over-55s are the most likely to have hit ‘peak stuff’
  • Saving for experiences most popular among under-25s
  • Major family occasions dominate experience-driven savings goals – ahead of holidays and expensive hobbies

New research from Charter Savings Bank1 shows saving priorities are switching as nearly three-quarters of adults (74%) say they focus on putting money aside to pay for memorable life experiences rather than material products. 

As consumerism works to find new ways to separate consumers from their hard-earned cash, many people believe they have achieved a state of ‘peak stuff’, where their homes are filled with more goods, products and materials than they perhaps need.

Of these, nearly half (48%) say they have become increasingly focused on saving for events, holidays and hobbies rather than buying products, suggesting that many consumers have either hit, or are close to hitting, ‘peak stuff’. 

On average, savers set aside a quarter (23%) of their total savings to pay for life experiences.
Major family occasions, such as landmark birthdays and weddings, top the table of savers’ experience-driven savings goals, ahead of a post-retirement holiday of a lifetime and expensive hobbies.

Charter Savings Bank’s research shows it’s the over-55s who are most likely to have hit the ceiling on buying products; over half (51%) of those who have changed their saving plans say they have enough material goods to last a lifetime.  Around one in ten over-55s (11%) estimate they spend more than half of their savings on events and experiences.

The under-25s are the age group most likely to save for experiences rather than material goods (78%), and nearly two-thirds (65%) of them say the key reason for doing so is they enjoy them more. More than two out of five (41%) of twenty-somethings are saving to fund expensive hobbies.  It’s not always a choice, however, as one in four under-35s say they are saving for experiences because they can’t afford to buy expensive assets such as a house or a car.

According to the study, on average people have so far spent nearly £4,200 on life experiences, while one-in-12 (8%) have paid over £10,000.

Around half (48%) of adults are currently saving for a major life experience with an average value of £3,400, but one in 20 are setting themselves a target of over £20,000.

Paul Whitlock, Director of Savings, Charter Savings Bank, said: “Many people are realising that when they buy ‘stuff’, it usually only depreciates in value, becomes obsolete, and the memory of its purchase wanes. However, when paying for meaningful events, the anticipation of the experience provides more than just a quick rush, and the memories after the event grow ever more valuable.

“The new car soon loses its ‘new car smell’, the new phone quickly becomes last year’s model, and the latest ‘must have’ gadget promptly becomes part of the furniture. But a holiday-of-a-lifetime can provide months of pleasurable anticipation and planning, then memories and anecdotes for years to come.

“Getting in to the habit of saving regularly can help us all achieve our ambitions, whether it’s memorable experiences for those of us with a house full of things, or consumer products for those who haven’t yet reached a state of ‘peak stuff’.”

Percentage of people who have spent money on different experiences

Type of experience or event Percentage of people who have saved for or plan to save for this experience

Major family events

50%

Post-retirement holiday of a lifetime

26%

Expensive hobbies

21%

Wedding anniversary

14%

Round the world tour

11%

Safari holiday

10%

Attending major overseas sporting events

10%

Extreme sports challenges

7%

1 Consumer Intelligence conducted research among 1,040 savers on behalf of Charter Savings Bank between 1st and 2nd May 2018.

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Cash ISA savers missing out on the transfer market

20 February 2018
  • Half of Cash ISA savers aged over 55 have never transferred accounts
  • Two out of five say they won’t switch because they want all their savings in one place and one in 10 believe transfers are too complicated  
  • Charter Savings Bank’s Mix and Match ISA platform enables savers to spread their annual allowance in more than one Cash ISA product at the same time

New research1 from Charter Savings Bank shows Cash ISA savers are missing out on transferring their accounts to gain more competitive rates and increased flexibility because they value convenience over better returns and fear the transfer will be too complicated.

The research indicates that half (50%) of Cash ISA savers aged 55-plus have never moved their accounts to another provider, with more than two out of five (43%) saying they don’t transfer their savings because they want all their money in one place.

However, nearly one in 10 (9%) say they have never transferred because they think the switch will be too complicated, while 42% believe they will not be able to secure a more competitive deal.

HMRC data2 shows around 10.3 million over-55s have money in Cash ISAs, with around 3.9 million opening new accounts each year. Under current ISA rules, most providers only allow savers to deposit their annual allowance into one type of Cash ISA account per year, limiting options for savers.

Charter Savings Bank is offering more choice with its Mix & Match ISA platform, enabling savers to spread their annual allowance within multiple Cash ISAs.

Most providers only offer a Fixed Cash ISA or Easy Access Cash ISA as an option to their customers and lock them in, whereas the Mix & Match ISA gives the customer flexibility.

With the Mix & Match ISA, customers don’t have to put all of their annual allowance into one single Cash ISA. They could for example open an Easy Access Cash ISA with £5,000 and then the following month deposit £10,000 in a 1 Year Fixed Rate Cash ISA product. If they have more money available they could open a third Cash ISA product using the remaining £5,000 of their annual allowance.

Charter Savings Bank has also adopted the industry’s eISA system to ensure most savers switching will benefit from a quick and simple transfer.

Its research shows the main motivation for transferring Cash ISA accounts from their existing provider is a rate reduction: 51% of over-55s who have moved said they switched because of a reduction.

Just 35% of over-55s say they always assess the Cash ISA offers each year and move if they find a better rate, while one in three (33%) say they move when the fixed rate term on their Cash ISA expires.

Charter Savings Bank’s research found the age group most likely to transfer Cash ISAs are those aged between 25 and 44 – around 62% of them have switched their Cash ISAs.

Paul Whitlock, Director of Savings, Charter Savings Bank says: “Transferring Cash ISA accounts is a straightforward process, now that the industry has signed up to new standards and is utilising new technology and systems.

“People regularly shop around for more competitive deals on a wide range of goods and services, and that should also be the case in the Cash ISA market. Those who don’t move are risking missing out on more competitive rates, greater flexibility and access to their savings when needed.

“The Charter Savings Bank Mix & Match ISA provides flexibility for savers and enables them to split their allowance across multiple accounts, all with competitive rates.”

Visit chartersavingbank.co.uk for full details.

1 Consumer Intelligence conducted research among 1,021 cash ISA savers on behalf of Charter Savings Bank between 24th and 25th January 2018.
2 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/640743/Full_Statistics_Release_August_2017.pdf

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Customers vote Charter Savings Bank Best Online Savings Provider for third year in a row

02 February 2018

Charter Savings Bank is celebrating its third anniversary early after winning the Online Savings Provider of the Year for the third year in a row at the 2018 Moneyfacts Consumer Awards.

More than 160,000 customers voted in the awards which are designed to identity the organisations which combine technical merit with service excellence and cover personal, household and family finance.

Charter Savings Bank received its award, which it also won in 2016 and 2017, at a ceremony at The Royal Lancaster Hotel in London.

The Online Savings Provider 2018 trophy takes the total of awards won by the bank since its launch in 2015 to 16 for its savings accounts and service in addition to a number of Highly Commended awards.

Paul Whitlock, Director of Savings, Charter Savings Bank said: “The fact that customer votes are a major part of these awards makes winning Online Savings Provider of the Year so special.

“Our aim since we first opened for business has always been to combine simple, straightforward savings products with good service and it is good to see that reflected with the Moneyfacts Consumer award.”

Shortlists for the Awards are assessed by Moneyfacts’ research team and only the companies rated as offering the best products go on to form the shortlist which is then voted on by customers. More than 160,000 customer surveys were completed making the 2018 awards the most competitive ever.

The University of East Anglia was commissioned to independently verify the customer survey and the subsequent analysis to ensure the process is fully transparent.

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Charter Savings Bank strikes twice at the Moneynet Awards

01 February 2018

Charter Savings Bank won two awards at the eighth annual Moneynet Personal Finance Awards, including Best All-Round Savings Provider and Best Fixed Rate Savings Provider. It was also highly commended for the Best Cash ISA Provider.

The Personal Finance Awards from Moneynet, one of the UK’s longest established personal finance information sites, recognise the top providers and products from the last twelve months.

Paul Whitlock, Director of Savings, Charter Savings Bank says: “Our business has gone from strength to strength since we launched in March 2015 and these awards cement the fact that we offer excellent choice and value to new and existing customers. We have a range of competitive products and it’s great to see this being recognised by the industry.”

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We’re all going on a retirement gap year

13 December 2017
  • Nearly two out of five plan an extended gap year trip when they are 60-plus
  • Two out of three are banking on savings to fund the £5,000 cost

New research1 from Charter Savings Bank shows older travellers are increasingly leading the way when it comes to gap years.

While traditionally a gap year is something students do on a tight budget after school or university, the bank’s study found two out of five (40%) workers are planning one when they are 60-plus and will fund their trip with savings built up through a lifetime of work. By contrast just one in five (18%) are planning gap years by the time they are 30-years-old.

Estimates2 show that in an average year, over half a million UK adults take a gap year, with older travellers spending around £5,000 on their trip. Around 60% of gap year travellers are students or people who are still working.

Charter Savings Bank research found around half (49%) over-45s have never taken a gap year or extended break from work but intend to take their chance to travel once they are in their 60s or have retired.

The gap year wish list is topped by continental Europe, with the under-25s in particular (48%) choosing it as their preferred destination.

TOP GAP YEAR DESTINATIONS

UK AVERAGE

UNDER-25s

OVER-55s

Europe

27%

48%

25%

Australia/New Zealand

17%

8%

18%

Round the World trip

16%

24%

11%

USA

16%

20%

14%

South East Asia

5%

8%

5%

South America

5%

Zero

4%

India

4%

Zero

4%

Africa

4%

8%

8%

Japan

4%

4%

2%

Source: Charter Savings Bank, September 2017

Would-be gap year travellers will rely on savings to fund their trips, the study shows. Up to two-thirds (63%) say they will take money from their savings accounts for the trip compared with just 7% who will use credit cards.

Younger travellers are slightly less likely to cash in savings – 56% of under-25s will take out cash while 16% will rely on credit cards and one in three (32%) will work during their gap year to raise cash. Only around 9% of over-55s will be working on their gap year.

Paul Whitlock, Director of Savings, Charter Savings Bank says: “Many of us think about gap years being the preserve of backpacking students, but increasingly we’re seeing that older customers are catching the travelling bug.

It’s worth remembering that once-in-a-lifetime opportunities can happen at any time of life, and whilst globe-trotting in your 60s might seem like a long time to wait it does have the advantage of travelling in a little more luxury and not having to run up debts to fund it.

It definitely highlights that a savings habit does pay off, even if the amount you’re able to put aside today seems too small to make a difference.”

The research shows the biggest motivation for a gap year – cited by 25% of those questioned – is the chance for a once-in-a-lifetime experience while 12% see it a chance for a career break and 11% are motivated by a desire to see the world.

The checklist below outlines financial considerations for those planning a gap year in retirement

  • Set a budget before setting off and if necessary see a financial adviser to asses your financial position
  • Make a plan on what to do with your property – renting out your home while you are away will help provide funds but you will need someone to manage the property and will need to review insurance
  • Take out long-term trip travel insurance
  • Move your finances online so you can manage money when you are travelling

On a regional level, those living in the South East are the most likely to plan a year off (14%), followed by those living in the North West (11%) and Yorkshire and Humberside (11%). In comparison, only 4% of those living in Wales are planning to have a gap year.

1 Consumer Intelligence conducted research on behalf of Charter Savings Bank between 20th and 21st September 2017 among a nationally representative sample of 1,029 UK adults aged 18-plus.
2 http://gapadvice.org/

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Financial Services Compensation Scheme

Financial Services Compensation Scheme

Your eligible deposits with Charter Savings Bank are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit www.fscs.org.uk.