Multinational insurance firm Aviva has launched “Aviva Save”, marking its entry into the UK’s cash savings market.
Using the “Savings-as-a-Service” technology built by German fintech Raisin, Aviva is rolling out the solution to its 15 million UK customers. Worldwide, Aviva claims to have 33.4 million customers.
The insurance giant cites the increase in savings reserves during lockdown as a reason for the market entry.
According to the Bank of England’s (BoE) latest monetary report, between March and November 2020 consumers accumulated a stock of savings of over £125 billion “in excess of what might otherwise have been the case”.
Aviva, which holds £522 billion in assets under management, isn’t the first insurance firm to enter into the savings market. In late 2020, both Willis Owen and AJ Bell launched savings offerings.
Fixed-term savings accounts
Aviva is starting off by offering a selection of fixed-term savings accounts.
With interest rates of up to 0.64% annual equivalent rate (AER), some of Aviva’s partner banks beat Marcus’ 0.5% easy-access saver which re-opened earlier this month.
The minimum deposit for an Aviva Save account starts from £1,000, with six-month to five-year fixed-term options.
In a statement, Aviva says customers can “pick and mix” savings offers from different banks, managing them all via the Aviva Save platform.
£1.6 trillion cash deposits
Roger Marsden, who heads up Aviva’s retail savings and retirement unit, says the firm’s research shows “more than half (57%) of people took action in relation to their savings during the last lockdown” – i.e. November.
BoE data in December shows that flows into other deposit accounts within the UK savings market rose to £20.9 billion. That’s a notable increase from £18.4 billion in November.
This is down to the fact households are saving on average £5,000 more than they were pre-pandemic. The UK’s central bank expects this “to rise substantially over the first half of 2021”.
Currently, around £1.6 trillion exists in household cash deposits. But as the BoE highlights, £225 billion of this is sitting in non-interest-bearing accounts.
Which means, despite rock bottom interest rates, an increasing number of consumers are looking for ways to put their new savings to work.