Saga, a specialist platform for those over 50, has partnered with Flagstone to launch a new savings platform. This platform allows savers to access and manage fixed-rate accounts through an app. It offers a variety of account options with terms ranging from one month to seven years, provided by more than 20 UK savings account providers.
However, users are required to sign up for an account with Saga in order to view the rates offered. This makes it difficult to compare rates with other fixed rate accounts. These indicative rates are only available for 12, six, and three month terms. Alternatively, other savings platforms like Raisin UK, Hargreaves Lansdown’s Active Savings, Flagstone, or Savings Champion’s Savers Hub allow users to view rates without signing up.
The best one-year fixed rate account at the top of This is Money’s savings table is offered by NS&I, paying an interest rate of 6.2%. Saga’s platform, on the other hand, offers a one-year fixed rate account with a rate of 5.71% through SmartSave. For a six-month fixed rate account, Saga’s platform offers a rate of 5.43% through SmartSave, while Monument Bank offers the best rate of 5.65%. Saga’s platform also offers a three-month fixed rate account with a rate of 5.17% through SmartSave, compared to Active Savings’ 5.15%.
Saga’s platform currently requires a minimum deposit of £40,000, limiting its availability to those with substantial sums to invest. However, Saga has stated that this minimum deposit may change in the future. Financial expert Andrew Hagger suggests that labeling the platform for the over 50s does not guarantee better interest rates. He believes that interest rates are the most important factor for customers in this age range, especially given the high minimum deposit. Hagger also highlights that users could miss out on £196 in interest by fixing with SmartSave on Saga’s platform instead of NS&I’s best buy account.
Saga claims that the motivation behind launching the savings platform was to meet the demand of competitive savings rates, convenience, and reduced paperwork among those aged 50 and over. Savings Champion’s Anna Bowes warns that while there are no account admin or management fees with Saga’s platform, Flagstone takes a cut of the partner banks’ interest rates, up to 0.4%. This means that users may earn more by going directly to the underlying providers. Bowes also notes that savings platforms may not be suitable for less technologically savvy savers who may require support.
Savings platforms such as Saga’s can be beneficial for savers with large sums as they enable them to spread their protection provided by the Financial Services Compensation Scheme across multiple holdings. This scheme offers protection of up to £85,000 per person or £170,000 in joint accounts with each eligible bank or building society. Savings platforms also have the potential to resolve the issue of inertia, with over £168 billion currently languishing in current accounts earning no interest. Bowes believes that once users are onboarded onto a platform, it becomes easy to monitor and switch savings in minutes without completing a new application or remembering multiple login details.
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