Kevin Gray column

‘Helping our young people to adopt a savings habit’

Kevin Gray, CEO of Bath Building Society

I am always being informed by my daughters that I have many bad lifestyle habits.  I vigorously protest my innocence to my accusers, but deep down it’s a fair cop girls!  I am guilty as charged and the truth hurts.  Despite acceptance of my many little failings, I do also recognise that I was fortunate to learn one very good habit from my parents.  Back in ’the olden days’, whenever I received some pocket money or gifts of cash for my birthday etc, I was encouraged to squirrel some of it away into Post Office savings stamps or into my savings account with the local Building Society. 

 As a young child I took to saving like a duck to water, so much so that I always had more money to enjoy on family holidays than my elder siblings.  They often enquired as to what magic was conjuring up my earthly wealth.  The answer was simple, I was putting aside small amounts of my money and was doing so regularly.  I didn’t know it then, but I had made saving one of my financial priorities.

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Fast forward 50 years (or so) and I find myself leading Bath Building Society’s (BBS) quest to improve the lives of our Members by promoting saving as a means of providing financial security. This is part of the Society’s social purpose. Latest statistics on national savings patterns are both worrying and encouraging. Almost 20 per cent of all adults living in the UK do not have £100 of savings to fall back on. More optimistically, the majority of working adults have managed to save more during the Covid Lockdowns. We at BBS see it as our job to help the former group adopt a savings habit `whilst encouraging the latter group to continue with their newly rediscovered thrift. 

A priority for BBS is to recruit more saving Members from the 18-35 year demographic group. Our idea is to start people saving early and to encourage them to steadily build their savings towards achieving deposits for future mortgages on their first homes. Using the ‘little but often’ rule that I learned as a child, BBS has launched two regular saver products that are specifically aimed at the 18-35 group. These products have attractive interest rates and it’s no surprise that they are proving to be popular. The best way of encouraging a lifelong saving habit is to encourage children and young adults to start saving before they reach the age of 18, and as such BBS offers children’s savings accounts and a Junior ISA (JISA) product. Our recent focus on encouraging early saving is now delivering success. I am delighted to report that in the first six months of 2021 over 50 per cent of our new Members were under the age of 35 and that the proportion of our new savings accounts opened by the under 35s continues to grow steadily.  BBS is hoping to enter the Lifetime ISA market in 2022 which will further add to its attractiveness as a destination for savings for those aged between 18 and 40.

"A priority for BBS is to recruit more saving Members from the 18-35 year demographic group. Our idea is to start people saving early and to encourage them to steadily build their savings towards achieving deposits for future mortgages on their first homes."

Education of our young people in financial matters is not given the priority in our schools that perhaps it should. This is in no way due to the fault of our schools who are under constant pressure to deliver the impossible using squeezed budgets. BBS regards the financial education of our children as being a very important part of its social contribution back to the City of Bath, and so, like many local and regional building societies throughout the UK, it sponsors packages of financial education to 6th form students in some Bath state schools that is delivered via a specialist charity called WizeUp. As we grow as a business, we aim to increase our involvement in this area.

The great success of pensions auto enrolment is that millions of workers are now saving something towards their retirement when previously they were not saving anything. This transformation is because employee contributions are deducted by employers via their company payrolls. What employees do not have in their pay cheques at the end of the month they don’t seem to miss! There is a lesson here for those like us who are trying to encourage more people to start a regular savings habit. I can announce that BBS will shortly be piloting a Payroll Savings Scheme with the intention of rolling this out to local employers in due course. The aim will be to encourage those employees who do not save anything to start to save regularly via deductions from their salary payments. This type of arrangement would effectively lead to employees prioritising saving ahead of disposable income and this would lead to growing savings nest eggs that would provide greater financial security in economic downturns.

I am hopeful that the savings habit that I acquired as a child is now starting to rub off on my daughters.  I now just need to work on losing a bad habit or two to keep them a bit happier. Please wish me luck!  If you think that Bath Building Society can help you or your family with saving, then why not contact us on 01225 423271.


15 Queen Square, Bath BA1 2HN

Tel: 01225 475730