Setting up a direct debit could help you save

29 May 2012 09:01:56

Regular automated transfers could be the best way to save.

If you regularly get to the end of the month without any money left over, you might want to try setting up a standing order or direct debit into your savings account to help you build up a nest egg. New research from First Direct suggests this course of action has become popular with consumers, most of whom manage to stick to their newfound savings habit.

One in four Brits use automated savings
First Direct's research suggests that one in four of us has arranged a regular direct debit into our savings accounts, with the average saver transferring £99 each month. Men are most likely to save in this way, according to a poll of more than 2,000 adults, which was conducted by Wriglesworth Research on behalf of the bank. Researchers found that 28% of men have set up a monthly transfer into their savings account, compared with 23% of women. And men also tend to save more each month - typically around £130, compared with just £89 for the average woman.

Majority of people stick to savings plans
The survey also suggests that people who set up a regular transfer into their savings generally stick to their monthly payments. First Direct found that 94% of savers manage to keep up with their savings plans, with just 6% cancelling their arrangements within the first 12 months. This means that setting up a direct debit could help you to build up a substantial nest egg within a relatively short period of time. And if you compare savings accounts carefully and choose one with a decent rate of return, you'll soon notice the interest building up and bolstering the contents of your piggy bank.

Automated savings 'the best habit'
Bruno Genovese, head of savings at First Direct, said: "With numerous pressures on our household finances and a lot of payments to juggle and keep on top of, it can be difficult to remember to set aside the money to save, which is why a regular, automated savings habit can be the best habit to get into for those who are able." The expert pointed out that standing orders and debits into savings accounts require "minimal effort" to manage and can help people build a "substantial" savings pot.

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