Saving for the future makes today feel better...

If this autumn’s price hikes on food, fuel and interest rates have demonstrated one thing, it’s the psychological value of knowing you have a rainy-day fund to dip into when you need it most.

I’m aware that it might seem odd or potentially even a little insensitive to talk about saving in the midst of a cost-of living crisis, but bear with me.

So much of our reaction to the grim headlines and the daily tide of economic misery is emotional. How many times have you heard financial commentators talk about ‘market sentiment’?

And while we can’t change the recessionary narrative, we can at least have some modest influence over our own situation. Research consistently shows that saving is one of the surest ways to build personal financial resilience and a sense of wellbeing. Creating a savings habit now is the simplest strategy to help cope with setbacks we may encounter in the future.

Hair-raising figures published on Monday (7th November 2022) by the Money and Pensions Service as part of this year’s Talk Money Week showed that a quarter of UK adults have less than ￡100 in savings. And it’s likely that few of us will feel as if we have much to spare as winter bites. But ask yourself – honestly – whether you could find a little bit to put aside every month, even just a few pounds.

A big part of the development work we have been doing at PayCaptain recently has been designed to encourage the savings habit through our app. Working with The Behavioural Insights Team, we’ve learnt a huge amount about how to prompt regular savings – and importantly, about the barriers that can often inhibit this.

Modern banking has been remarkably good at doing certain things. Cashless payment really came into its own during the pandemic, and innovations such as Apple Pay have transformed daily life. But in many instances, opening and interacting with savings accounts remains administratively cumbersome and time-consuming. It can easily seem as if it’s too much trouble. So even if we can afford to do so, we just don’t bother.

Yet our research with Behavioural Insights Team for the new SmartPay functionality in the PayCaptain app has shown very clearly that simply by gently ‘nudging’ users to place modest sums in their personal savings pot on a regular basis, and displaying its growth in real time using simple interactive graphics, planning ahead becomes more accessible, tangible – and immediately rewarding.

So in the long term, given all the uncertainties of the world as it is, PayCaptain users will almost certainly be able to thank themselves. After all, knowing that you’re saving – that you’re thinking about tomorrow and taking some control over it – is enough to make any of us feel better about life in the here and now.