Flexible new savings product provides for customers’ long and short term needs

Old Mutual launched a unique new product that allows consumers to save for the future while having access to their funds in the short term. The need for this product is reinforced by the findings from the latest Old Mutual Savings and Investment Monitor (released in July), which indicate that consumers are experiencing immense financial pressure and that their savings have become a lot more short-term focused.

This new solution, called the 2-IN-ONE SAVINGS PLANS, consists of a Long Term Pocket that allows customers to save for their long term goals; as well as a Short Term Pocket that allows customers the flexibility to withdraw or top-up money when needed. The minimum contribution is only R150 per month and contributions are split between the Long Term Pocket and Short Term Pocket according to a pre-determined scale. 

Says Anele Mbuya, an Old Mutual Marketing Actuary, “We know that our customers want to plan for their future, but find it hard when their everyday needs become more urgent than their long-term savings goals. The 2-IN-ONE SAVINGS PLANS give customers the best of both worlds”. 

“The product was developed as a result of feedback received from customers and advisers. Market research that we conducted also showed the need for a product that allows customers the flexibility to access some of their saved money in the short term, while continuing to save for the future.” 

To encourage customers to save and continuously pay their monthly contributions, Old Mutual will pay a specific amount back into their Savings Plans when they reach certain saving milestones. 

According to Mbuya, “This is a unique benefit of the 2-IN-ONE SAVINGS PLANS, which is meant to foster a savings culture in South Africa and encourage customers to stay invested for the full term of their Plans. Our business philosophy is to provide for the changing needs of our customers and with this new solution we offer accessibility, flexibility as well as investment growth with security. In short, we are saying that saving for tomorrow shouldn’t stop you from living today.”

 Other product benefits:

• The 2-IN-ONE SAVINGS PLANS also have an automatic contribution increase, to help keep pace with inflation, which customers can opt out of if they cannot afford the increase.

• The Long Term Pocket’s contributions are invested in the Old Mutual Smoothed Bonus Fund and the Short Term Pocket’s contributions are invested in an Old Mutual Money Market Fund.

• The 2-IN-ONE SAVINGS PLANS have two variants - the 2-IN-ONE SAVINGS 4 EDUCATION and the 2-IN-ONE SAVINGS 4 MY GOAL.