Apps to automate your savings

Many people have embraced smart technology. In the UK, more than three-quarters (75.8%) of the total population used a smartphone in 2023. They also downloaded mobile applications 2.3 billion times — and not just for communication and entertainment purposes. In fact, one app sector that has experienced a growth in downloads in 2023 is money saving apps.¹

What are automatic money-saving apps?

There are many different money-saving apps on the market. Some require users to manually move money, while others save money automatically.

Automatic money-saving apps can help people save without having to do anything beyond the initial setup. Tactics include rounding up purchases and saving the roundup amount or making automated transfers from a different account or paycheque.

When used correctly, these types of apps can help people put money aside without having to think about it.²

Great money-saving apps

Great money-saving apps help users build up their savings on a continuous basis. These apps often have a variety of features to help manage personal finances and identify opportunities to save. When they are synced with the user’s bank accounts and credit cards, the apps can also offer financial insights and recommendations.³

Helpful apps to save money depend on the individual and their personal saving goals. For example:

• Rewards apps. These can help save money by offering deals, coupons, cash back, or other rewards with purchases. Popular apps include supermarket rewards apps and fuel loyalty apps.

• Budgeting apps. These types of apps can help provide a snapshot of personal finances, create a budget, and offer insights into savings opportunities.

• Round-up apps. These work by rounding purchases to the nearest pound and saving the difference in a separate "savings pot" that allows savings to grow over time.

• Goal-setting apps. Users can set up different savings goals — such as retirement, holiday, or a down payment. They can calculate how long it will take to save up for each goal, keep track of progress, and adjust the savings plan if needed.

Benefits of using automated money-saving apps

Automatic money-saving apps can offer a wide range of benefits:

• Convenient expense tracking. Many savings apps can help keep track of daily expenses and analyse spending — even on the go.

• Less temptation to overspend. A quick status check on a personal account, spending goals, and recent purchases can help with better decision-making to avoid unnecessary purchases.

• Customisable goals. Many money-saving apps let users save towards specific goals, such as an emergency fund or retirement.

• Increased financial awareness. Being able to see an up-to-date picture of their personal finances can make people more aware of their spending, and help them avoid common financial mistakes.

• User-friendly experience. Automatic savings and money management apps can help provide a clear financial picture and make it easier to keep track of savings. Some people use spreadsheets on desktop computers for their budgeting, but these can be difficult to open and edit on smartphones.

• Potential earning of interest: When apps automatically put money away, it typically goes into a separate but linked savings bucket where it can earn interest. The automatic savings function (and not having to think about it) can be a plus for many users in continuing to grow their savings with interest.

Drawbacks of using automated money-saving apps

While many automated money-saving apps can help people build up their savings, there are potential drawbacks to consider:

• Not compatible with computers. Most apps are designed for mobile devices and may not run well on desktop computers, where many people do their online banking or budgeting.

• Lack of control. Setting up automatic transfers to help build savings may sound like a good idea, but it also means that there could be surprises when forgotten automatic transfers leave less money than anticipated in the spending pot.

• Hidden costs. Some money-saving apps come with hidden costs or fees to unlock extra features. It's important to read the reviews and fine print before choosing an app.

• Data privacy concerns. Many third-party savings apps require permission to access a person’s financial accounts, and banks are required to share banking data with authorised third parties if people have given permission to do so.²

Kickstart with monetary apps

Payment facilities can be straightforward with apps that are easy to use and offer a wide range of benefits. PayPal’s digital wallet, for example, provides one central tool to help, send and receive money easily and securely, and shop online. The first step is to download the app and find out how PayPal’s digital wallet works.

When individuals link PayPal to their bank accounts and credit cards as well as other authorised apps with PayPal third-party permission, they can pay with rewards and reap even more benefits.

The PayPal app can help keep track of expenses, and PayPal’s data protection policies offer increased security. These policies include advanced encryption, security measures and technology to help safeguard the account, email payment confirmation, and fraud monitoring.