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LONDON, Oct. 30, 2019 – This Halloween, new research from Ford Money has revealed that one in 10 (9 per cent) of UK savers have experienced a fright after discovering savings in long-forgotten accounts. Equating to almost 5 million UK adults, this includes both those who have found money in an unused account (7 per cent) or in one that has been declared dormant by their provider (4 per cent).
According to Ford Money’s findings, savers have rediscovered an average of £1,528 in savings per person in forgotten accounts. This equates to an estimated total of £7.4 billion of forgotten cash across the UK, with individuals leaving their savings untouched for an average of over four years.
Dubbed the ‘zombie’ savers, of those who uncovered forgotten cash, a third (39 per cent) said they had failed to keep track of their savings on a regular basis.
However, Ford Money’s research reveals these are not the only frightful situations in which savers are finding themselves. In fact, 41 per cent found themselves stuck in a ‘nightmare’ when it comes to saving, with the most common pitfall being using their current accounts as savings accounts.
Almost a quarter (24 per cent) admitted to having used a current account as their savings account, with 12 per cent of this group saying savings accounts are too difficult to understand and a further 15 per cent stating they simply “did not know what else to do”.
“Our research revealed that almost one in five (18 per cent) savers find products too difficult to understand and can often forget about some of their savings accounts. In some cases, this confusion has resulted in consumers depositing all their cash into a single current account, without opening a separate savings account earning that earns a better interest rate,” said Suzanne Lewsley, Ford Money’s chief deposits officer.
“Greater clarity and simplicity of products is important, as well as more proactive consumer self-education. This will help savers avoid sleepwalking into a nightmare and miss out on the interest rates and products that will allow them to make the most out of their money.”
Savings nightmares
The research found that when asked what situations savers would find the most irritating, however, ‘forgotten money’ did not come top. Almost half (48 per cent) of savers stated that a surprise fee or withdrawal charge was most likely to give them a fright. In fact, this topped the list of most irritating potential savings nightmares, closely followed by the lowering of interest rates without warning (46 per cent) and receiving a reduced interest rate due to their account being declared inactive (28 per cent).
| Top 5 potential savings nightmares that plague savers |
|
| Unexpected fees or charges |
48% |
| Reduction on interest rate without being informed by provider |
46% |
| Reduced interest rate on account due to inactivity |
28% |
| Unexpected expiration of introductory offers | 27% |
| Forgotten money in an unused savings account |
16% |
“Savers may sometimes feel like they are stumbling through the dark when it comes to understanding and effectively managing their savings accounts, encountering a number of savings scares along the way,” Lewsley said. “However, there are many ways you can avoid some of the most common pitfalls. For example, our research found that a quarter (25 per cent) of savers have never attempted to find a better interest rate on other products and providers, so some research into the market is a great place to start.”
Top tips to help you avoid common savings scares this Halloween:
1. Never put all your pumpkins in one basket – Make your money more secure and reap the rewards of interest rates by opening a savings account –; there are a variety of products to cater for different needs. If you need quick access to your money without any withdrawal fees, an easy access saver would be best. A fixed cash ISA would work a treat if you’re happy to put some money away for an extended period and will allow you to take advantage of tax-free interest.
2. Refuse to let pesky withdrawal fees and other potential charges creep up on you – Make sure you understand the withdrawal terms on an account before you sign up. Depending on the type of account, some may charge for early withdrawals, limit you to a certain amount or require a period of notice before you can remove your money. The fine print may look scary, but the devil’s in the detail, so if you’re unsure seek advice.
3. Don’t find yourself in a graveyard of forgotten accounts – It can be hard to keep track if you have multiple savings accounts with different providers, and you could find yourself leaving some of your hard-earned money behind. Make a note of each account, its type and any important dates, such as when it reaches maturity or when your interest rate is set to be reduced by your provider.
Notes to editors
All figures, unless otherwise stated, are from a survey by Opinium, commissioned by Ford Money. Total sample size was 2,000 UK adults. Fieldwork was undertaken from 4-8 October 2019. The survey was carried out online. The figures have been weighted and are representative of all UK adults (ages 18+).
9% of UK adults have discovered forgotten money in a savings account equating to 4,897,811 UK adults (9%*52,383,000). They discovered on average £1,528 per person equating to a total £7.4 billion (4,897,811 * £1528).
About Ford Motor Credit Company
Ford Motor Credit Company is a leading automotive financial services company. It provides dealer and customer financing to support the sale of Ford Motor Company products around the world, including through Lincoln Automotive Financial Services in the United States, Canada and China. FCE Bank is a subsidiary of Ford Credit, which is a subsidiary of Ford. For more information, visit www.fordcredit.com or www.lincolnafs.com.
About Ford Money
As part of Ford Credit Europe (licensed as FCE Bank plc), Ford Money is a savings provider in the UK. FCE is a registered bank in the UK, authorized by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and PRA to accept deposits. Deposits of up to £85,000 are protected by the UK government’s Financial Services Compensation Scheme (FSCS). For more information, visit www.fordmoney.co.uk.
Ford Money is a trading style of FCE Bank plc., which is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Firm Reference Number 204469. Registered in England and Wales under registration number 772784.
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Ford Money is a trading style of FCE Bank plc. which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Firm Reference Number 204469. Registered in England and Wales under registration number 772784 with registered address at Arterial Road, Laindon, Essex, England, SS15 6EE. Please do not contact this address for customer servicing. For ways to get in touch please visit 'Contact Us'.
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