If you are reading this, then you are in the right place to avoid becoming a negative saver. However, there are millions of people in the UK that are unaware their money is not earning as much interest as it could. By knowing about Zopa and peer to peer lending, you can save yourself from the zombie state that is the current UK ISA and savings account market. Zopa recently collaborated with the Centre for Economic Business Research (CEBR) and YouGov to examine the UK savings market and the nation’s attitude towards saving money.
The report found that as a nation we are losing out on at least £2.19 billion, as dormant money stagnates in savings accounts. Savers with a median level of £3,500 in a typical cash ISA account would have seen interest payments of only £23 last year. Accounting for inflation, the value of these savings would have declined by £77, meaning savers would actually be £54 out of pocket. Quite a startling prospect when cash ISA’s are one of the most recommended and valued forms of saving.
In contrast the ‘real’ average interest rate (allowing for inflation) for peer-to-peer (P2P) lending in 2012 was an estimated 3.4% positive return. Based on the figures above and taking into account inflation, P2P lending would have generated £2.795 billion in interest for UK savers or £165.90 per household. Given the choice of being £54 down or £165 up, there really should be no difficult decisions to make with your money.
Over half (55%) of Britons we asked are worried that low interest rates are holding back the economy and nearly two thirds, (61%) believe the government should be doing more to get smart savings and loans moving. Equally, HMRC could have seen a further £0.6bn injected into the Treasury at the basic rate of tax.
One of the worrying findings from the report was that over a fifth (22%) of Britons actually have no savings at all and the median savings for all households under 45 years old (average) is just £1,500.
If you are keen to get a better return than from your bank and beat inflation, then why not try growing your savings through peer to peer lending with Zopa and make your money work harder for you. Additionally, if you know someone who may be a negative saver, then help them turn their savings positive by sharing this blog post and spreading the word about Zopa and peer to peer lending.
We are always looking to hear from savers that have lent through Zopa and received a better return than from their traditional saving accounts. Please share your stories with us by emailing firstname.lastname@example.org.