Martin Lewis, well known for his Money Saving Expert website, has provided help to people through his platforms, and have allowed people to save money in various ways. And today was no different, as Martin used his Money Show to provide the latest, up-to-date help to Britons. Over the lockdown period, many people have been able to make substantial savings.
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While financial circumstances have, on the whole, been tough, remaining at home has been somewhat advantageous for particular households.
In fact, many people have used the lockdown in order to money save, with a survey undertaken by savings marketplace Raisin UK showed an equivalent of £1.8billion in savings were made throughout lockdown.
This was achieved through simple reductions and lifestyle changes.
However, for those who have made significant savings, many are curious as to what the best course of action is to take with the extra money.
One Briton wrote in to Martin’s show to ask him where he thought a lump sum of savings would be best placed at this time.
Of course, there are various options, but Martin revealed where he thought would be best, and indeed, worst, to place a larger sum of money at this time.
He said: “A third of people have been able to save during the lockdown. But I’m afraid savings rates – I’ve never seen anything like it.
“Of course the UK interest rate is 0.1 percent. The top savings rate at the moment is 1.16 percent with NS&I Easy Access, likely because it is the state-owned financial institution, and have to give you at least two months’ notice before dropping it.
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“Normally, I’d say try to fix your savings to lock in on a better rate, but the best rate currently is just one percent.
“But actually, the first thing you can do is pay off any expensive debts. If you have a mortgage, look at overpaying on that, and always keep an emergency fund aside.
“Paying off debts is the best and safe thing you can do right now.”
Figures from the Bank of England showed many people chose to pay off debts with the money they may have saved during this time.
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A staggering £7.4billion was repaid in April in terms of debt from credit cards and personal loans.
This is the largest net repayment since records from the bank first began in 1993.
In terms of savings, interest rates have been low recently, as Martin noted, potentially due to the uncertain financial circumstances brought about by the COVID-19 crisis.
In March, the Bank of England took an unprecedented move to significantly decrease its base rate.
The base rate now stands at 0.1 percent, and has seemingly had a knock on effect for familiar providers.
Although a bank still remains the safest place to put money in the long-term, as Martin highlights it may not be the best option right now.
People should always explore the options which are best for them and their personal circumstances.
This may involve taking independent financial advice to analyse an individual situation.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip
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