4 smart savings strategies to help you grow a pot of cash in 2024

A new year is a time for setting new traditions, and for some people, this may mean building a savings pot or looking for higher returns on their existing pots of cash.

There have already been some signs of more savers shopping around to get the top rates.

City regulator the Financial Conduct Authority recently said there has been an increase in the amounts held in fixed-term and notice accounts (where notice has to be given to make withdrawals) in recent months.

The regulator is encouraging savers to shop around.

But according to research from bank Shawbrook, nearly one in five (19%) of us has no plans to take action with our savings this year.

Adam Thrower, head of savings at Shawbrook, has some suggestions for finding new year savings resolutions that work for you:

1. Work out what type of savings account is right for you

You may be looking to build a “rainy day” fund, which may need to be broken into quickly in an emergency, such as to cover urgent household repairs or a boiler breakdown. Or perhaps you’re saving short-term for a holiday in 2024.

People in these situations may want to consider an easy access account, or one where there’s a higher rate in return for some notice being given to make withdrawals. Make sure you check the notice period to make sure it aligns with when you may need to withdraw the money.

Some people will also have longer-term savings goals and may want to lock into fixed-rate deals. Some may also want to consider stocks and shares investments.

Thrower says: “Work out what savings account is going to work best for you – it’s a strategic choice – and then find the provider who can offer you the best rate for that type of account.”

2. Switch or lose

Keep an eye on “best buy” comparison tables for the top rates, as these can often be withdrawn quite quickly – so if you snooze, you lose.

Thrower says: “Our research reveals over a quarter (26%) of consumers intend to save as much as possible in 2024. If you’re also in this camp, think about not just how much you’re saving, but where you’re saving it.

“With only 9% of consumers intending to switch to a higher rate account, even though 19% are planning to monitor their finances more closely in 2024, too many people could be missing out on better returns for their savings.”

3. Check out the deals online

Sticking only to the big brands on the high street could limit your search, and the smaller challenger savings providers often offer very competitive rates to tempt you to try them.

Thrower says: “Embracing the digital landscape and looking at online banks and new savings providers will give you a broader range of products, and could massively maximise your savings returns.”

He advises checking that the provider is registered with the Financial Services Compensation Scheme (FSCS), which pays out consumers in situations where financial firms go bust.

4. Consider tax

Higher returns could push some savers into paying tax. The personal savings allowance permits savers to earn interest up to a certain point without paying tax. Basic rate taxpayers, for example, can earn as much as £1,000 annually in savings interest without paying tax.

ISAs are ring-fenced from the taxman, so they may be particularly attractive to those nearing the threshold.

Shawbrook’s survey research was carried out by Censuswide in November 2023, among more than 2,000 people across the UK.