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Building A Savings Pot in 2020


Savings accounts are essential for most people’s financial strategies. With over three-quarters of adults (79%) holding some money in savings, there is no doubting the value of these financial instruments. 


The benefits of having a savings account are seen in the ease of saving money combined with the safety they provide. However, with both the political and economic landscape changing considerably in recent years in the UK, consumers are beginning to eye up alternatives to see their money go further. 

Moving away from tradition

There are a number of reasons that consumers are moving away from savings accounts, the first being the low level of interest rates. 

At the start of 2008, interest rates set by the Bank of England stood strong at 5.5%. However, on the turn of the financial crash a few months later, interest rates plummeted to a paltry 0.5%. 

Unfortunately, interest rates have remained below 1% since. On its own this is detrimental for savers; however, this is compounded when analyzing the rates of inflation. 

In fact, inflation over the past decade has grown more than interest rates. This means that those holding money in a savings account are actually losing money in real terms relative to interest rates – tradition would dictate that holding money in a savings account is the wise financial decision, however, we have to disagree. 

Broaden your thoughts

We are seeing a decline in the number of people holding money in traditional savings accounts, however, the reason for this is more due to the services provided by high street banks. 

Most are unhappy with the information provided by high street banks, claiming that they are not informed of the best options for them. 

We are also seeing a rise in challenger banks such as Monzo and Revolut. These banks are providing users with the ability to access money with greater ease and have considerably more functions than high street banks, including greater ease of moving money between accounts and overseas. 

On top of this, challenger banks are also providing greater levels of interest on savings accounts on average, with all ten of the high street banks offering lower levels of interest.


We are seeing a rise in people investing their money as a means of tackling real term loss. 

Back in April 2019, FJP Investment commissioned a survey asking over 1,000 consumers what they planned to do with their money over the next 12 months. The fastest-growing investment was debt investment. 

With 9% holding an investment at the time and a further 20% saying they were planning to make a debt investment over the next 12 months, changes are afoot in the financial field. 

The reason for this movement was seen in the fixed, high levels of returns that can be achieved, and also the relative safety that a debt investment usually provides. Consumers are taking advantage of the high level of returns that can be achieved by carrying out investments of this kind.

Plans going forward

With 38% of consumers planning to put the money elsewhere should interest rates remain low, which we predict they will, the financial landscape is going to change significantly. 

Whilst we predict that savings accounts will remain an essential part of most people’s financial plans moving forward, we do think that those with higher amounts kept in savings should be looking at moving a proportion of this into higher-yielding options. 

Whether this is through an alternative account through a challenger bank or through investment, of which there are many options for you out there, consumers should be looking further afield to grow their money and stop the continuation of real-term loss.