Being there through a lifetime of membership
From younger age groups to those in later life, we help to build financial resilience for members throughout their time with Nationwide.
This area of our website offers information about some of the things we do as a responsible business. For information about our range of products and services please visit our homepage.
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Helping members to save for their future
Saving money is one of the best financial habits our members can adopt. It helps to:
- create a buffer against unforeseen financial emergencies
- pay for large purchases
- avoid debt and reduce financial stress
- create a financial legacy
- provide a greater sense of financial freedom.
Here are some great examples of how we have used member research and insight to enhance our savings propositions.
Pay Day Save Day
There was a big societal issue no one was talking about – 11 million people across the UK had less than £100 in savings (Money and Pensions Service research 2018). Our ambition was to get the nation saving again. In September 2019, Nationwide launched Pay Day Save Day, a behaviour-change campaign designed to encourage people to take small steps towards a bigger savings goal.
This campaign was bigger than Nationwide: it didn’t matter who you saved with, so long as you saved. Pay Day Save Day was designed to generate a ‘movement’ with a simple behaviour change that could help people make a difference: it’s easier to save the day you’re paid. We crafted a media strategy that delivered our message to the masses but also brought the concept of Pay Day Save Day down-to-Earth. The use of the comedy vehicle helped disarm people over a sensitive and private issue but engaged them at the same time through an evolution of Voices.
The campaign took a two-pronged approach, to announce to the many that Nationwide’s goal is to get people saving a little every month, because it’s the right thing to do, and to encourage our target audience to take notice and believe it is relevant and achievable for them personally through a tailored media strategy for each target segment.
Start to Save
We designed this product to encourage and reward good savings habits and help members build a financial buffer. This instant access saving account offers a 1% interest rate and the added incentive of prize draws, with a chance of winning £100.
- We launched Start to Save in February 2020 to help play our part in getting the nation saving and to support the Money and Pensions Service’s financial wellbeing strategy.
- 124,400 members who had less than £100 with NBS, now have more than that as a result of saving into the account as at 29 March 2021.
- Despite the pandemic and the financial difficulties this has created for people, younger age groups have continued to try and save where they can.
ISA Season 2020
‘ISA Season’ is a key time for the savings market, with members presented with a suite of options for tax-free savings.
To promote the benefits of this saving option, and to demonstrate that our members’ money goes back to them via products and services, we launched a prize draw with prizes of up to £20,000 (10 prizes of £20,000, 10 prizes of £10,000 and 40 prizes of £5,000):
- We saw 22% more members grow their ISA balance compared to the previous ISA season (for members that transacted between 6th March – 30th April 2020).
- About 60% more younger adults paid into their ISA compared to the previous year, and roughly 20% more young families paid into their ISA (for members that transacted between 6th March – 30th April 2020).
Mutual Reward Bond
This competitive fixed rate bond launched in September 2020 and was exclusively available to existing members. As well as the competitive rate, it also offered members the chance of winning £10,000 in the prize draw. £3.36m of prize draw winnings has been paid out, with 336 lucky members winning £10,000 each after saving into the bond. As a mutual we are always looking at ways to reward our savers and encourage everyone to keep saving. Our prize draws are proving very popular at encouraging both new and established savers to put money away.
The Mutual Reward Bond launched at the end of September 2020 and attracted more than 84,000 members by the end of 2020.
Impulse saver and Round Ups
As people use digital payments more and cash less, the ‘change jar’ that many of us relied on to raid in emergencies is disappearing. Squirrelling away loose change can be a simple way to build up savings over time. Our ‘Impulse Saver’ and ‘Round Ups’ are digital versions of this. Members can sign up in the mobile app and quickly transfer money from a Nationwide current account to a savings account as well as round up the pennies from their spending activity.
The importance of banking to support younger age groups
There is lots of value in learning to manage money from a young age, which is why we have designed accounts to suit the specific needs of younger members from secondary school through to university.
Our FlexOne youth current account is available to members aged 11 to 17. It’s designed to offer an account to our youngest members, whether this is their first bank account and they want somewhere to pay their pocket money into or they are receiving wages from their first part-time job.
FlexOne gives our youngest members a safe space to get their first experience of using a current account. By offering an account with no fees and charges and no overdraft, blocking gambling transactions and offering the option of a cash card or Visa debit card, we can give both children and parents peace of mind they’re protected from going overdrawn or making undesirable transactions. The Visa debit card can be used while abroad completely fee-free, perfect for first holidays or school trips. In 2020 we saw 262,000 FlexOne card payments abroad each month.
Offering interest on credit balances up to £1,000 allows our young members to gain experience in saving their money and being rewarded with a return on their investment. To support the development of financial management skills, the account can be managed using our Banking app, internet banking and by registering for text alerts. With 99% of FlexOne members registered for online banking and 74% registered for mobile banking, our young members are becoming more engaged in their money by easily checking their balance and transactions.
Money can be tight at university, which is why the FlexStudent arranged overdraft is designed to grow with members during their studies.
Students registered on a UCAS course will be offered a guaranteed interest-free £1,000 overdraft in their first year of study, increasing to £2,000 in year two and £3,000 in their third year. We know that not everyone will need this amount. So, to support making borrowing manageable for students and not putting them in a difficult financial position, we only increase the limit if the member asks us to.
To support members with managing their account, they can use our Banking app, internet banking and register for text alerts. We don’t charge students any fees or charges for using the account.
After students graduate, they can continue holding their fee-free overdraft for up to three years. We appreciate paying back an overdraft can take time, so we support members in staying on top of their finances by slowly dropping the overdraft limit each year.
Banking overseas can be expensive, especially for student travel as gap years and semesters abroad can be longer than an average holiday. Therefore, account holders studying abroad or going on holidays benefit from completely fee-free foreign usage on the account.
All students are given a contactless Visa debit card and can make use of Apple Pay, Google Pay and Samsung Pay, allowing them easy access to their funds.
Our role for members in later life
Half of today’s 60 year olds are expected to live to 90 (Gratton and Scott (2017): The 100 Year life), and most children born today can expect to live past 100. But life expectancy has risen more quickly than healthy life expectancy – people at 65 can expect to live just half of the remainder of their life without disability. And even though 97% of people say they don’t want to go into a care home (Better At Home 2019 - A Live In Care Hub Report About Elderly Care (opens in a new window)), 15% of over-85s do end up spending later months or years in a care home, at an average cost of £39,000 per year (figures taken from Carehome costs and fees (opens in a new window)).
The traditional stages of education, then work, then retirement are becoming blurred
A 50% reduction in active defined pension benefits from 2012 to 2020, and the introduction of pension freedoms, have gone some way to help create a more flexible and fluid later life and retirement. Retirement is now a slower transition as people choose to keep working, reduce hours or take a break, then return to work later. The gift of longer life creates space for a balance between relaxing and investing in skills and relationships.
Wealth is being transferred down the generations
Two-thirds of people under 35 purchasing their first home do so with financial help from parents, family and friends, who contributed a total of £6.3 billion in 2019 (figures taken from Bank of mum and dad - PDF, 803KB opens in a new window)). However, on average, inheritance is not typically received until the age of 61 (information taken from Resolution Foundation IC report - PDF, 494KB opens in a new window)).
Key areas where we can support our members in later life
Helping members enjoy life
Members told us:
- ‘I don’t want to stop’
- ‘I want to enjoy new experiences’
- ‘I want to be part of my community’
Helping members make the most of their home
Members told us:
- ‘I want to stay in my own home’
- ‘I want my home to work for me’
- ‘I want to make money from my home’
Helping members make the most of their money
Members told us:
- ‘I want my money to stretch’
- ‘I want my money to last’
- ‘I want to share my money with my family’
As we live longer, we’ll need to give more attention to our tangible assets, such as our wealth. And to our intangible assets, such as family and friends, skills and knowledge, and health and vitality. Striking a balance between these will be ever more important for quality of life.
We have started the journey of helping members meet these needs and manage their wellbeing by launching a range of later life lending products. And we plan to do more.
Our ambition is to create confidence that the time our members spend in retirement will be as worthwhile as they would like it to be.
Our commitment is to help 25,000 members by 2025, to use the money built up in their homes to live a better retirement, and this is how we plan to do it.
For many people, the start of retirement is an exciting new chapter, one they’ve worked, saved and prepared for. But sometimes, retirement might arrive earlier than expected or bring with it challenges that mean our members need to rethink their finances.
To help, our dedicated and specially trained later life mortgage consultants offer fee-free advice on our range of borrowing options. We have hosted a series of Later Life webinars to help explain our borrowing options in later life, including hosting an online Mortgages for Later Life event in December 2020 to answer any questions our members had on the subject.
This is a type of equity release that lets members unlock the value in their home as a tax-free lump sum of money. Monthly repayments are only made if the borrower chooses to, and loans are usually repaid when the last borrower moves into long-term care or dies and the home is sold. This is particularly helpful when a member has experienced a shortfall in their pension.
Members in later life find the release of equity useful for reasons such as:
- clearing debts
- helping a loved one buy their first property
- paying for home improvements
- making a major purchase, such as a new car
- taking the holiday of a lifetime.
Taking out an equity release mortgage means being able to do this without having to dip into a pension or move home and without using your other finances.
Retirement Interest Only mortgage
Our Retirement Interest Only mortgage is very similar to a standard interest only mortgage, but with some differences. Unlike regular interest only mortgages, this mortgage doesn’t have a fixed end date to repay the balance. The main part of the loan (capital) is usually only paid off when the last borrower moves into long term care or dies.
Retirement Capital and Interest mortgage
Much like a standard repayment mortgage, you pay back both interest and capital on a monthly basis.
This mortgage offers members the ability to borrow up to a higher age than on a standard mortgage. Unlike our Retirement Interest Only and Lifetime Mortgage, this product is still designed to repay your mortgage in full by the end of your term. This gives our members a full range of options for accessing and repaying mortgage-related funds.