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Majority of the UK has set a saving goal, but it could take years to reach as people save less than 2017

POSTED: 3rd December 2018
IN: Newsroom
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  • Over three quarters (78%) of UK savers have a specific savings goal in mind, with retirement the number one priority
  • The low rate of saving means it could take considerable time to reach long-term goals
  • Almost one third of people (32%) still do not save at all

The latest annual Savings Tracker1 from specialist Bank, Aldermore, reveals that most savers in the UK have a specific goal to keep them focused and motivated (78%), although the rate of savings is making it difficult for them to reach these goals.

Savings goals

Despite the challenging savings environment, it is encouraging that three quarters (75%) still believe it is important to save, with retirement being the number one priority for over three in 10 (31%). This is consistent with last year’s findings:

Long term savings goals

% of savers 2017

% of savers in 2018

Retirement

29%

31%

Buying a house

20%

16%

Holiday of a lifetime

19%

18%

Home renovations

16%

17%

Children

14%

14%

Provide children/relatives with an inheritance

14%

13%

To pay off mortgage

12%

14%

University fees

8%

5%

A wedding

6%

4%

A second home / holiday home

6%

6%


The Savings Tracker found long term savings objectives differ across the demographics, with men more likely to be saving for retirement (34% vs 27% women), while women are more likely to be saving for a house (20% vs 12% men).

Those in their 40s and 50s are most likely to be saving for retirement, while 35 – 44 year olds are most likely to be saving to pay off their mortgage (26%) and unsurprisingly, 18 – 24 year olds are saving to buy their first house (49%).

Mind the savings gap

The research has uncovered a worrying savings gap. With people saving 7% of their pre-tax income in 2018 compared to 8% in 2017 (the equivalent of £1,798 vs £1,832), major goals such as buying a house, planning a wedding, or making significant home renovations could take many years to reach based on the current rate of saving. For example, the average amount needed for a deposit is now £50,000. So for the younger generation, whose primary goal is to save for a house deposit, it could take over 25 years to save that sum based on their current rate of saving (£1,027 a year) 2. For those planning a dream wedding, it could take couples (aged 25-34 years old) over eight years to save for the big day, with the average wedding costing just over £32,000 3.

The battle of short term vs long term

It is clear too, that saving for short-term goals can get in the way of the long-term goals – 36% of savers agree that saving for their short-term goals affects their ability to save for long-term objectives, with saving for a holiday a top priority for two in five (41%) savers.

Short term savings goals

% of savers 2017

% of savers 2018

Holiday

40%

41%

Buffer against unexpected expenses

28%

26%

Home improvements

22%

22%

Everyday living

16%

14%

A new car

15%

17%

Luxury goods

11%

9%

A big ticket purchase (like a new boiler/fridge)

9%

10%


Ewan Edwards, Head of Savings, Aldermore comments:
“Despite a low interest rate environment, it is encouraging to see that three quarters (75%) of the UK believes saving is still important. However, not only are savers putting less away, we have found that a significant proportion of adults in the UK (32%) still do not save at all. This means reaching long-term objectives is going to be extremely difficult, especially for those saving for retirement or a house. Instead, setting aside a regular amount each month can make a goal more achievable.

“To help reach those goals, we recommend people continue to commit to making changes to their savings habits as long-term it can go a lot further than expected. We also encourage everyone to shop around for the best rates to make their cash work harder in the low interest environment.”

ENDS

1The figures are sourced from a nationally representative survey conducted by Opinium Research with a sample of 4,009 online interviews with UK adults, from 23rd to 29th May 2018.

2 According to figures from the English Housing Survey released by the Ministry of Housing, Communities & Local Government (MHCLG)

3 According to figures from Hitched, a survey of 3,3000 couples. Calculation based on 25-34 year olds saving £1,982 a year.

Notes to editors

For further information, journalists can contact:                                           

Chelsey Palmer, Aldermore
Phone: 0208 185 3142
Email: Chelsey.palmer@aldermore.co.uk

 For further information about Aldermore, please review our Notes to Editors page

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