Savings rates in the UK – like interest rates on loans – are lower than ever, facts that no doubt discourage many people from even trying to save. But it’s important that you do what you can to increase your savings, even under today’s challenging conditions.

The case of the disappearing pot

Following years of high unemployment, scarce credit, and soaring housing costs, many Britons are finding it difficult if not impossible to put much into their savings pots. To make matters worse for savers, Bank of England drastically reduced its base interest rate during the worst of the financial crisis, virtually eliminating any incentive to stash money away for a “rainy day”. It was already raining. Tax-free Isas and other savings plans just weren’t worthwhile to a populace whose income had plummeted while many of their major expenses continued to rise. Despite the fact that low interest rates were appealing to younger and first-time home buyers, the steep increase in housing prices has obliterated any advantage the potentially cheaper loans had to offer. And lenders’ decision to bolster their bottom lines rather than actually use the cheap money as intended to make loans only added to the economic gloom. It’s no wonder savers – especially older savers – feel like they are worse off than ever.

Getting a realistic picture of your own savings return

While the government and the banking industry would probably love to see a rosier picture painted, the truth is that there are a number of significant challenges to adding to your savings pot right now. That doesn’t mean you should put off savings, though. On the contrary, it is important to continue adding to that pot, even during tough times when it doesn’t seem to be doing much good.

Especially during such challenging times, it is essential to implement the most efficient savings plans available. Doing so might involve cutting some costs in a few areas, particularly in what you spend for entertainment and luxuries. You will be best served if you come up with a realistic budget – with regular contributions to your savings included – and stick to it. You will also want to seek out the most beneficial savings tools that will provide you with the best possible return according to the level of risk with which you are comfortable.

Finding the best savings methods might seem daunting at first, but there are tools available that will give you some essential guidance. Of course, the safest path will require that you retain the services of a licensed and experienced financial advisor, but you can get an idea as to what will serve you best via online resources that will allow you to estimate the performance of your savings plan. Shop around and find which bank offers the best deal, based upon how much and how frequently you will be able to contribute and how accessible you will need your savings pot to be in the event of unexpected expenses or emergencies. After all, life happens, independent of any plans you make.

The bigger picture

Though savings have been on a seven-month downward slide in Britain, the central Bank Rate has remained stable at 0.5 percent since 2009. But across Europe it’s a different story, with some countries now experiencing negative returns. In April of 2015, for example, Switzerland became the first country to auction off 10-year debt with an interest rate of negative .055 percent. Investors who purchased these debts would actually be paying the Swiss government for the privilege of investing there, should they find it necessary to sell back the debt prior to the 2025 maturity date. Obviously, investors who purchased such debt are in it for the long term, a tactic that is well beyond the reach of all bu

t a rarified few wealthy investors. Both in the UK and the EU, interest rates are unlikely to rise much in the foreseeable future, but at least that is good news for borrowers, if not savers and investors.

Although low savings rates may very well be the “new normal” as direly predicted by some of Britain’s senior bankers, it’s still worth your while to do whatever you can to increase your savings pot. Interest rates may eventually creep upward, but don’t sit around and wait for that. Double down on your efforts to save whatever you can right now, even if only to keep you in the habit of saving. Once rates begin to increase, that habit will be easier to maintain, the results will be much more apparent, and your future financial health will thank you.