This is a frequent question asked during client meetings, especially in the current economic environment.

The answer is; there is no fixed or set amount as this is dependent upon your circumstances. The minimum suggested sum is the equivalent of at least 3 to 6 months expenditure. It is also sensible to have funds set aside for a ‘rainy day’.

As at April 2023, consumer price inflation (CPI) stands at 8.7%*.  The Bank of England base rate is 4.50%.  Inflation is an economic reality that affects the purchasing power of our hard-earned money. In a high inflation economy, where prices rise rapidly, it becomes imperative to find ways to safeguard the value of our savings.

Prior to a recent review meeting, a client sent me a copy of their spreadsheet with a breakdown of cash savings, held with different banks, various terms, and interest rates. Although impressed with the spreadsheet, I was shocked at the amount of time required to constantly keep up with chasing competitive interest rates, not to mention keeping a record of the different logins for all the bank accounts!

This was the prompt for CBW Financial Planning to start working with a cash savings platform, to help our clients manage cash and provide following benefits:

• Access to competitive interest rates
• Flexibility, including a wide range of deposit and account terms from over 30 banks and building societies.
• The clients remain the beneficial owner of their money regardless of how many accounts opened.
• Convenience and Simplicity
• Security and Protection, via the Financial Services Compensation Scheme (FSCS), which provides protection up to £85,000 per person, per banking licence.
• One time sign up process
• Access to a large banking network
• Multiple client account types including individual, corporate, trusts, pensions, power of attorney, and charities.

It’s easy to become complacent with cash and leave funds sitting in an everyday account, earning little or no interest. As at 1^st June 2023, a top paying instant access account will earn interest of 3.85% AER**. Based on savings of £10,000 this will provide £385 gross over 12 months. Some longer term fixed rates are over 5%.

What Next?

Its important to keep the right balance of keeping cash for the short term versus the longer term via investing. If you would like to discuss your situation or would like to consider the savings platform please feel free to contact Charlotte Elgar or your existing Financial Planner at CBW Financial Planning Limited.

*source: www.ons.gov.uk 01.06.2023

** secure trust bank 01.06.2023