Almost one in three Brits have less than £1,500 in savings. Around 15% have no cash savings at all.
Savings platform Raisin is keenly aware of the huge impact this financial hole can have on society and the wellbeing of individuals. It recently commissioned research that found 18mn people were losing sleep over money worries. A key step forward in changing this, says Raisin UK CEO Kevin Mountford, will be educating people and making it easier for them to save. “We want to take the hard work our of finding the right savings account,” he comments.
Raisin began in Berlin in 2013 and has become one of the most successful technology led financial services companies in Europe. Raisin serves over 250,000 customers across Europe with over 90 partner banks, and has gained €170mn in investment from impressive backers including PayPal and Goldman Sachs. Raisin continues to enhance its products as more partner banks join, with the aim of offering a selection of competitive options for the end user.
Raisin UK offers users a range of accounts with competitive rates, all of which are FSCS protected, from its ever-increasing range of banking partners. “Users can select, apply for and manage their savings accounts all in one place, as well as quickly and easily seeing how their savings are doing,” Mountford explains. “It’s a one stop shop solution, helping people ‘earn’ more from their savings. This can offer independence and confidence to those who want to manage their money better – basically it’s all about less hassle, more interest.”
The business came to the UK in 2017, and in late 2019 it launched Raisin.ie in Ireland. It’s set to expand into the US this year following the acquisition of Choice Financial Solutions, and the platform aims to have 10 banks signed up in that region by the end of the year.
The UK remains Raisin’s second largest retail savings market, and over the past few months platforms like Raisin have seen a surge in interest. People with large balances want a safe place to keep their money – particularly while the investment market is volatile and lots of savers are looking for fixed term rates. There are also groups of people who are still working from home full time. Without travel costs and unable to spend money on leisure activities, they have disposable income to put away. In addition, being at home under lockdown has given many people more time to think about their finances and, since they can’t visit their local bank, increasing numbers are exploring digital solutions.
In recent years, the number of different products available to help consumers meet their savings goals – even if they are just to start saving – has increased. “Since the 2008 financial crisis, the government and subsequently regulators have been trying to boost competition within the UK. We’ve seen around 20 new bank licenses issues over the last decade: this ultimately gives consumers more choice,” Mountford explains.
“We should also remember that in the main, the FCA regulated banks mean savers are protected up to £85,000 via FSCS. This means the likes of Raisin.co.uk can help by bringing together a number of these banks and making it easier to open and then monitor your savings account in a single marketplace.”
Mountford is an advocate of taking practical steps to gain more control over finances, and the positive impact this can have on the lives of UK consumers. He advises taking simple steps and getting into the right habits can make people feel more positive about their finances, paving the way to wider goals such as holidays or home ownership. “As a nation we’ve become very used to the idea of ‘buy now pay later’, but generally we also recognise the need to save, so it’s important to adopt good habits,” he comments. “Think about saving some money when you get paid as opposed to the end of the month – even squirrelling away a little bit often represents a good first step.”
Going forward, Raisin will continue to work with and grow its network of banking partners. “Over the coming years we’ll cement those partner relationships,” says Mountford, who has a positive outlook for the future. “The UK business is going from strength to strength: continually adding more banks and building societies and in turn more products.
“We’re also investing our time and effort to develop distribution partners, so Raisin can offer a number of set-up solutions in order to deliver a cash savings solution to a third party – we already work with Yolt and Monese and have a few more about to launch. As we build our partner network we’ll continually look to improve the user experience and focus on our aim of being the leading cash savings site for customers.”
As for the increasingly crowded and fast changing market? “We’re not threatened by competition,” says Mountford. “We welcome it, because it shows an increasing awareness of the importance of saving.” For consumers, this will translate into even better options and information about smart saving, so they can begin to build up financial resilience and improve their wellbeing.