Chip, the automatic savings app offering access to one of the UK's highest interest rates, has registered a summer of record growth, as the UK’s savers’ priorities shifted towards financial security and saving in light of the coronavirus pandemic and its impact on the economy.
The fintech company also saw an overwhelming demand for their new Interest Accounts platform, offering savers access to the best returns regardless of however much or little they have put away - all while interest rates are plummeting. Since then, Chip continued the gradual roll-out with the aim of offering the best returns on the market and plans on adding more rates and accounts soon.
Chip’s core savings feature uses AI to analyse savers’ finances and calculate the amount to put aside, before moving the money into an account in their name (with an option to cancel), meaning it was able to pick up on the drop off in spending and adjust savings accordingly. Combined with increased manual contributions from savers, this resulted in a sharp rise in the amount put aside during lockdown. June saw the highest average amount put aside per user per month in Chip’s history - £214.70 - which represents a 138% growth compared to June 2019 as well as a 103% increase from March 2020, when lockdown began.
Auto-saves alone also saw a significant increase, with May being the highest on record with £114.69 on average per user per month. Compared to the start of lockdown in March (£74.79), July’s monthly auto-save amount went up by 42% to £106.33.
Chip users also made more manual contributions to their savings:
• The average monthly manual deposits saw a massive 356% increase compared to this time last year.
• The average single manual deposit amount saw a sharp rise in the second half of 2020, registering the largest amount on Chip's record, in June - £257.55. Compared to June last year, this represents a 355% increase in single manual deposits.
• In the first six months of 2020 (January to June), the average single manual save amount increased by an impressive 256%.
The change in financial priorities is also reflected in the goals set by Chip savers. The fintech’s data points towards a focus on financial security with goals such as "safety net fund", "bills", "overdraft" and "credit card" making the top 10 in July, and “safety net fund” keeping the number one spot - previously occupied by “holiday” - since the start of the pandemic:
1. Safety net fund
2. Holiday
3. Home
4. Christmas
5. Bills
6. Overdraft
7. Australia
8. Playstation 5
9. Credit card
10. Clothes
Chip’s Chief Executive Officer, Simon Rabin, commented: “This year has been without a doubt one of the most turbulent in our lifetimes. The events of 2020 have really highlighted the importance of having a financial buffer and taking control of your finances. At Chip, we are seeing this shift first-hand: our assets under management grew 40% in just two months, as consumers became more concerned about financial security, and our user base nearly doubled this year.
“Many of our peers across the fintech sector have been focussed on making it easier to manage your spending, but we’re using this disruptive tech-led approach to make sure people are saving up and earning the best returns.”
“As Chip continues to grow, our focus is on providing more people with the tools for making saving easy, effortless and rewarding. We’re committed to opening up the exclusive world of the traditional savings industry and building the digital app-based future of savings.”