Reputation, rates and recommendations: The new rules of saving in the UK
As part of our research into attitudes to saving and investing, produced in collaboration with YouGov, we conducted 15 in-depth qualitative interviews with UK consumers. These interviews took a section of those surveyed, and over 45 minutes, discussed their views on saving, their thoughts on switching providers and their views towards savings products from fintech firms. The interviewees were selected to consider demographic differences, including age and location within the UK to ensure a balanced outlook.
The objectives of the interviews were to:
- Explore the triggers and barriers to moving from traditional banking providers to using digital (Fintech) players.
- Better understand the motivations and barriers to switching, specifically exploring inertia, trust, and knowledge of interest rates.
- Ascertain their views on fintech players, particularly on fintechs vs high street and the role of FSCS protection.
- Understand the triggers and barriers to using investment platforms as a current account and/or savings provider.
“Even if it's a sub-brand, if it's backed by someone I know is a relatively solid business, then that's something I'm looking for.”
A fan of fintech in general, for example, using Revolut when travelling abroad, Gareth is open to switching savings providers. However, a rival offering must combine better interest rates, incentives (e.g. bonuses or insurance benefits), easier access, and hassle-free account management than traditional high-street banks.
He prioritises instant access to funds without restrictions or withdrawal penalties, and the ability to transfer money between accounts seamlessly, through a well-designed app.
Trust is a key factor for Gareth when choosing a provider. He builds trust through personal recommendations and recognised names with a strong reputation or backing from a well-known institution.
“If they wanted to build the trust, they would have to show their credentials in terms of security, that your money's safe there and that they're going to do right by you.”
A long-term Nationwide customer for banking and savings, Phil also uses a fintech platform for a Lifetime ISA after Martin Lewis recommended it. While he appreciates features like roundups and automated deposits, he admits that the app is not as integrated into his daily financial management as his primary banking app.
While Phil is comfortable using fintech for saving purposes, he is reluctant to trust them with his salary or significant savings. To increase trust in fintech, he believes companies need to offer strong security measures, better customer protection, and reassurances that his money would be safe in unexpected situations.
Despite that, Phil is open to switching savings providers and relies on expert opinions and customer reviews to evaluate a provider’s credibility. His priorities for a new provider are a better return on his savings, complemented by security and ensuring his money is safe and accessible when needed. Phil also values a smooth, user-friendly experience where he can quickly deposit, withdraw and monitor his savings.
“It was literally the interest rates were the things that got me in. But now that I've used them, it's just how easy it is to do everything.”
Lisa has focused on strict saving habits in the last year to ensure financial stability. She has multiple savings products, using a mix of banks and fintechs including Chase, Monzo and Moneybox.
She is driven to switch savings providers by higher interest rates and values better offers and incentives, such as cashback or loyalty rewards. She prefers providers that offer easy access through digital banking.
Lisa researched which bank held her money, ensured FSCS protection, and read the terms and conditions to avoid hidden catches. She also relies on community reviews, particularly on Reddit, to gauge real user experiences. While she doesn’t see significant barriers to switching, she is mindful of potential drawbacks, such as losing existing benefits, restrictions on certain savings products (like ISAs), and the effort involved in moving accounts.
“I don't think there would be any challenges [to switching]. It would just be the reputation of the other provider, that they had some decent reviews anyway.”
Like many consumers, Emma prefers using one bank for her savings and current account. While she prefers high-street banks, she also uses fintech apps to avoid conversion charges when travelling outside the UK.
Emma sees fintech companies as convenient and innovative, but they can also be difficult to use at times. While she appreciates features like currency exchange and the ability to keep certain funds separate, she finds the app less user-friendly than traditional banks, particularly when transferring money between accounts.
She has no loyalty towards any provider and would consider switching again if there were financial benefits or a trusted recommendation. Ultimately, for her to entirely switch her savings to a fintech provider or challenger bank, they would need to prove better interest rates, ease of use and reliable customer support.
“I usually look online first. One of the best places that I tend to look at is either Uswitch or Money Saving Expert.com with Martin Lewis. I find his advice very good. And, of course, it's free.”
For William, saving has always been a priority, and his main goal is financial security, ensuring he has funds for future expenses. He prefers to manage his finances to avoid fees and have complete control using a mix of incumbent firms and fintechs.
William spreads his savings across multiple banks to stay within the FSCS protection limit and to maximise the benefits from different providers.
Most of his experiences with financial providers have been positive; however, he finds cash ISA rates disappointing. To get better returns, he’s moved funds beyond traditional banks to fintech and investment providers. When opening a new savings product with a fintech, William typically starts with a small deposit to test the waters and build trust over time and, overall, finds fintech platforms as good as traditional banks.
