It was really frustrating, and I didn't want to email Akeeba over this as it seemed like IT WORKED FOR EVERYONE. So I thought it must be something I was doing wrong! And it was, but thought it would have been good if there was a more detailed documentation. Maybe it's just me or the new generation syndrome, everything needs to be spelt out hurhur. Anyway, for all the rest of the lazy bums like me, if you are having a similar problem with the user groups ACL in joomla for Akeeba, here's a visual mini tutorial.It is similar to what is described in the documentation given in the Akeeba documentation, but with a little of my addons.
This article assumes you are fairly familiar with Joomla.
1. Under User Manager: User Groups, create a user group called Subscribers
2. Click on Viewing Access Levels and click New to create a new viewing access level.
a. Fill in the level title as Premium Content
b. Select the user group that you have previously created, Subscribers.
c. Click Save and close
3. Once you have done the above, you can go ahead to set your selected content to the the View Access Level Premium Content. An example is shown below:
5. Now comes the part that I had been tearing my hair over. As you can see later, it was really a very minor thing I missed out on. Note the circled part, leave it as PUBLIC. I went on and changed it to something else and hence it didn't work. Go to Extensions > Plugin Manager, click on the Akeeba Subscriptions - Joomla! Usergroups Integration.
6. Add a subscription link to your menu. You can choose to select multiple types of subscriptions
And that's it! Now you can try to login as a user and test your subscription to see if it works.
Hope this helps someone out there, and thanks to Akeeba for creating an awesome product!