As the world celebrates World Savings Day, Aviva is encouraging consumers to overcome their financial fears and develop better savings habits. The company has identified six “spooky money habits” that can challenge people’s financial futures, including forgotten pensions, unexpected expenses, impulse buys, lack of budgeting, procrastination, and saving with no interest.
Firstly, many people have forgotten about their old pensions, with 3.3 million lost pension pots in the UK worth £31.1 billion. Aviva’s “Find and Combine” service has helped people recover lost pensions worth over £565 million. To avoid this, individuals can track down their old pensions and combine them to ensure their retirement savings are not forgotten.
Secondly, unexpected expenses such as recurring subscriptions, unused gym memberships, and daily coffees can quietly drain wallets. Conducting a monthly expense audit and canceling unused services can help prevent this. Additionally, impulse buys, especially when online shopping, can add up quickly. Using a 24-hour rule before buying non-essentials and setting spending limits can help individuals stay in control.
Thirdly, not having a budget can lead to financial mistakes. Creating a simple monthly plan, listing income and essential expenses, and allocating a certain amount to savings and discretionary spending can help prevent unexpected surprises. Reviewing and adjusting the budget regularly can also help individuals stay on track.
Fourthly, procrastination can be a major obstacle to saving. Setting up automatic transfers to a savings account or cash ISA and investing spare pounds into a pension can help build savings without having to think about it. Even small amounts saved regularly can grow significantly over time. Setting goals, such as a holiday fund or an emergency buffer, can also make saving feel more rewarding.
Lastly, saving with no interest can result in lost potential interest. Shopping around for a better savings rate can help individuals earn more interest on their savings. According to the Bank of England, a record £300bn of household savings are sitting in accounts paying no interest, resulting in hundreds of millions of pounds of potential interest being lost.
Alistair McQueen, Head of Savings and Retirement at Aviva, emphasizes that saving doesn’t have to be scary. Starting small, staying consistent, and making saving a routine can help individuals build momentum and grow their savings without even noticing. This World Savings Day, Aviva urges everyone to reflect on their financial habits and make one small change that could lead to a less frightening financial future. By exploring services like Aviva’s Save online service, which provides easy access to a range of fixed rate, easy access, and notice accounts, individuals can take control of their savings and start building a more secure financial future.