5 reasons to be cheerful amid the doom and gloom

Writers: Laura Suter and Danni Hewson

There’s lots of depressing news out there at the moment, but we’re here to deliver a ray of sunshine to your day. While the headlines are filled with doomy forecasts about the nation’s financial health, there are some reasons to be upbeat about our finances too. Here are five to put a pep in your step.

1. You can get a decent return on your cash

Rising interest rates mean a far better return on your cash savings. We’re talking up to 9% in some cases – that would have been a pipe dream even a year ago.

You’ll need to do a bit of hunting around to find the best option for you, but here’s a quick run down.

Easy-access accounts are paying over 4% now, so that should be your baseline to measure all other accounts against. Fixed rate accounts will pay you more than easy-access, with a one-year fixed rate account paying almost 6% (big caveat here: all rates are changing pretty quickly at the moment, so this might have changed since). If fixing for that long is too much of a commitment, you could plump for a notice account, where you just have to give a certain amount of notice before you withdraw your cash – these accounts will pay somewhere between the top easy-access rate and the top fixed rate account.

Regular savers are where you can get the top headline interest rates – up to 9%. But they are often quite restricted in how much you can pay in. That means they are great if you are saving new money each month, but may not be the best option if you’ve already got savings sitting in an account. Let’s put the increase into cold hard cash figures: the top easy-access savings account paid 0.5% two years ago and now it pays 4.2%, according to Moneyfacts – so on £5,000 of cash savings you’d be getting £25 in interest two years ago compared to £210 today. Not too shabby.

More on our cash savings hub

2. More women are investing their money

More women are investing! That’s what the latest figures from the Government on how people are using their ISA accounts show. If we look through those stats, which are for the 2020-21 tax year, they show 1.1m women are using an investment ISA, compared to 931,000 a year earlier – so 170,000 more women investing in the space of a year. On top of that, 324,000 women have both a cash and an investment ISA, up almost 100,000 on the year before, so that’s great news.

The downside to this is that despite this surge in women investing, the gender investment gap hasn’t really shifted, because more men are investing too. If we look at all investment ISAs where money was added in the 2020-21 tax year about 60% were from men and 40% from women. When we look at the figures for both cash and investment ISAs women are actually slightly more likely to have an ISA overall, so they are saving, but they are still more likely to stick to cash rather than invest it. For example, women make up 57% of all cash ISA accounts that were paid into during that year, compared to 43% of men.

But let’s celebrate that investing boom and hope that more women start investing in the coming years too.

Thinking about starting investing? Check out our first-time investing guide.

3. Food prices aren’t rising so much

There are so many numbers floating around from different organisations about food price inflation it can be hard to get a clear sense of what’s really going on. But there is good news to be had because whether is the British Retail Consortium, Kantar or the Office for National Statistics, the story is the same: food inflation really seems to have peaked. Now don’t get too excited, that just means prices aren’t rising quite as quickly as they were overall, but some wholesale prices have come down and supermarkets are finally reaching for the red pen.

Hardly a day goes by when one of our food retailers isn’t announcing big price cuts on “everyday essentials”. A packet of cornflakes in Sainsbury's, beef mince in Morrisons and bags of pasta in Tesco have all come down in price over the last couple of months and while the final bill is still going to make you wince, you should be able to find savings if you’re prepared to shop around. And don’t just assume the discounters have the best deals because some items might actually be cheaper on the shelves at Marks and Spencer’s Simply Food. What’s more, regulators are keeping a close eye on prices and putting pressure on the supermarkets to make sure we benefit as quickly as possible when prices continue to fall.

4. More women are paying into their pension

Women are embracing their pensions and more are paying into them. The government published data for the first time on the gender pensions gap – looking at the difference between men and women paying into their pensions. The headline figures weren’t great, but if you dig into the data there are lots of sources for cheer.

Read more about the gender pensions gap.

Auto-enrolment, which meant that people were automatically signed up to a pension scheme when they started work, has been great at boosting the number of women paying into a pension. If we look at the number of people who are eligible for auto-enrolment, 89% of women are paying in to a pension compared to 87% of men. So that’s great news, slightly more women who are entitled to that automatic pension are paying in. What’s more, in the younger age groups they have bigger pensions. Among those eligible for auto-enrolment who are aged 30-39 women have bigger pension pots than men.

The figures are less positive when we look at those people who are reaching retirement age today. But the people hitting the age of 55 today will have been paying into that pension during a very different working life to the younger people of today. Put simply, for those retiring today there is a big gender pensions gap but there is reason to be hopeful about the retirees of the future.

More on SIPPs

5. Energy bills are falling

Long, warm days mean most of us aren’t watching our smart meters quite as fastidiously as we did in the winter, but all of us are still acutely aware of the cost of energy. Most of us will have had an update from our supplier letting us know that the price cap will change from the 1st of July, and for the first time in more than two years the amount we pay is coming down.

The average household on the price cap will pay £2,074 a year from 1st July. It’s worth remembering that though we were paying more from October last year (£2,500 a year on average thanks to the Government’s energy price guarantee) we were also receiving £400 off our energy bills from the Government on top. So, if you do the maths, we’re only go to be better off to the tune of £26 – but that’s a step in the right direction. There are a few things you should consider as energy prices fall:

1. Remember to keep your meter reading up to date
2. Check your bill to make sure your supplier has passed on the price cuts and that it matches up with your usage
3. Find out if you qualify for any energy support schemes
4. Sign up for price fix alerts (but make sure you read the small print and remember if prices fall you could end up paying more than the default tariff)