Making saving feel good: The flexible approach to contributions

With inflation rising over the last few years and the general cost of living going up, it’s no surprise that trying to put money away at the end of the month can feel like an impossible task. 

Data from the FCA shows that the amount deposited over the last year in ISAs and bonds has gone down by over £2 billion compared to the year before. 

Research from GoCardless also shows that over a third of people in the UK (37%) say the process of saving for a mortgage deposit is ‘difficult’, and of those, nearly half (46%) admit that it has had a negative impact on their mental well-being. 

When asked why, 65% say it’s because their income has stayed the same while the cost of everyday goods has gone up. 

At a time when it’s increasingly difficult for your customers to put money away, how can you create strategies to make saving easier and help customers get to their goals faster? 

Flexible contributions 

One month can be very different from the next when it comes to your customers’ finances and how much there’s left to save. Being flexible towards their financial situation will help them to put away when they can and also make savings contributions not feel like such a heavy burden. 

Variable Recurring Payments (VRPs) provide an ideal way for savings and investment businesses to do this. With VRPs, customers will be able to adjust their savings contributions in line with their financial fluctuations, whilst keeping to a regular schedule. 

VRPs also offer instant settlement of payments. Instant settlement will help customers see their savings amount go up as soon as a deposit is made. This can be powerful in creating a positive feeling towards saving. Contributions instantly land in their account instead of taking a day or two to appear, helping customers feel the direct impact towards their savings goal.

Plum, the money management app, is excited about how VRPs will help customers save in a way that works for them. 

“VRPs will allow us to both process payments instantly and vary the amount customers invest in line with their financial situation at any given moment – all part of continuing to be a responsive wealth creation partner for them.”

Elise Nunn, Head of Operations, Plum 

Read more about their approach to customer savings contributions. 

Give the gift of saving

Saving can often feel like a major lifestyle change is needed in order to reach a goal, like cutting back on social activities or subscriptions. One home-buying savings app GoCardless works with is trying to make the process a lot less daunting for its customers. 

They recognised the power of gifting in helping customers save towards their housing deposit. They use open banking to allow friends and family to contribute to customers’ Lifetime ISAs via a unique link, without the hassle of entering bank details, a feature called Gift time. 

"The experience we’ve built lets Mum or Dad see how much time their contribution shaves off the journey to the overall savings goal. And for our users, instant payments make it simpler to move money than it is with the traditional Direct Debit system."

A flexible approach to saving

The future of finance is underpinned by transparency and flexibility. With open banking, it’s possible to help people build a lifestyle that enables them to meet their financial goals on their terms, rather than financial management determining their lifestyle.

It can also offer simple and secure ways to expand the savings burden and bring friends and family together. 

To find out more about how to create a positive financial experience, get in touch with us today.