A recent survey held by the National Savings and Investments organization (NS&I) has indicated that over one third of British people do not have enough savings to cope in an emergency and over one eighth have no savings at all.
NS&I is backed by HM Treasury and is an Executive Agency of the Chancellor of the Exchequer. The survey has been conducted every quarter since 2004 and is considered to be a snapshot of how people in the UK are saving. In April this year, 2597 people responded to the survey.
The latest results showed that 13% of Britons had no savings, 36% didn’t have enough to cope should an emergency arise and 25% also indicated that they were unlikely to save in the coming months.
Experts believe that this survey indicates that the high cost of living is impacting on peoples ability to save. As wage increases are not increasing at the same rate as the cost of living, the ability to save may be diminished further. Tim Mack, a spokesperson for NS&I said, “It can be difficult to save and pressures on disposable income often prevent people from setting aside as much as they would like”.
Only 26% of people confirmed that they had set themselves savings goals. The main reason people had for saving was to prepare themselves for an upcoming holiday.
Whilst 37% of people were saving for their holiday, 35% are saving for a deposit to buy a home. Other reasons for saving include saving for an emergency (32%), saving for retirement or a car (21% each) and saving for their children’s future (19%).
The survey indicated that British people save an average of 8.31% of their monthly income. Men tend to save 8.43% of their monthly income, an average of £115.80 per month and women save 8.19%, an average of £84.84 per month.
The survey also showed that younger people were more likely to save than older people. 40% of people between the age of 16 and 24 indicated that they had savings goals and 44% indicated that they were more likely to save in the coming months. However, only 25% of people aged between 35 and 44 had savings goals and only 14% suggested that they would be more likely to save in the coming months.
Although the current economic climate is a barrier to saving, there are several steps people can take to improve their ability to save:
- Monitor your outgoings and consider any options where you can spend less. Transfer the savings into a separate account. For example, you could try taking packed lunches or leftovers to work or try cycling or walking to work during the summer months.
- Set up direct debits to regularly transfer money into a savings account.
- Shop around and consider switching your savings account to one with a better rate of interest.
- Have a savings plan and review it at least once per year to make sure you are saving effectively.
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