- More people (36%) than not (30%) understand the importance of prioritising saving for tomorrow rather than spending for today
- Over a quarter (28%) say that although they want to save, at the end of the month they have no money left to do so
- Almost half (49%) of 16-34 year olds believe their financial situation is not sustainable
The latest annual Savings Tracker1 from specialist Bank, Aldermore, shows that the significance of saving is hitting home. Over a third (36%) of people realise that they should be saving for their future, compared to 30% who do not. This encouraging sign comes at a time when three quarters (75%) believe the current environment makes it a challenge to save.
The reality of saving
Despite savers having good intentions, the economic reality for many is very different. Over one in four (28%) say that although they want to save, at the end of the month they have no money left to do so. Because of this, over half (53%) of UK adults feel that despite trying to save as much as they can every month, they still feel as though they’re not saving enough. The situation has not improved for the majority over the past 12 months, as 56% felt they were not saving enough in 2017.
With men saving an average of almost £1,000 more a year than women, it is unsurprising that the feeling of not saving enough is much more prevalent amongst women; 60% compared to 45% of men. As a result, half of men (49%) feel they are saving enough for a financially secure future, compared to just three in 10 (31%) women.
Savings habits across the ages
Across the ages, the younger generation (50%) are most concerned with having a financially secure future. Although 18-24 year olds try and save as much as they can, this group most commonly feels that it does not save enough (70%), compared to the national average of 53%. Almost half (49%) believe their financial situation is not sustainable; an increase from the 44% who felt this way in 2017. The latest figure is almost double the national average of a quarter (25%) who feel their situation is currently unsustainable.
A possible explanation for this could be that almost two in five (37%) 18-24 year olds know they should save more, but simply want to spend their spare cash. More have adopted this attitude towards spending over the past 12 months, as only third (33%) had this mindset in 2017. Unsurprisingly, the older generation are more disciplined with their savings, and this commitment increases with age. Just a quarter (25%) of 45–54 year olds say they spend the money they know they should save, and this is the case for just one in five 55-64 year olds (20%).
Aldermore recommends the following savings tips:
- Set aside a regular payment to your savings account at the start of every month;
- Be disciplined;
- Set a short and long-term savings goal to work towards;
- Always track your spending and monitor budgets;
- Shop around to find the best accounts on offer – there are still a number of good accounts on the market despite the low interest rate environment.
Commenting on the latest research, Ewan Edwards, Head of Savings, Aldermore says: “It is encouraging to see that more people than not understand how important it is to save for the future. Although the economic reality often stops people from achieving their financial goals, we are pleased to see that the significance of saving has struck a chord.
“Whilst many want to save, our research shows that nearly one in four (23%) have no money left at the end of the month. In addition, a fifth of people (20%) believe there is no point in saving at the moment due to low interest rates. We understand how challenging the current environment is for savers, and why this can be disheartening.
“Despite the challenges, we believe that building a better savings habit can make a huge difference for the future, whether this means setting savings targets or monitoring spending more closely. Crucially, the low rate environment means that it is even more important for people to shop around to find the best savings accounts to make their cash work harder.”
1 The 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.
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