Britons saving at an ever increasing rate as the population becomes more concerned over its future wealth

2nd March 2015

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Britons are becoming much more concerned about their financial future as new research from Scottish Widows has revealed that three quarters of people are now saving.

The UK is becoming a nation of savers, as the insurer’s savings study – which polled 5,000 – found the number squirreling away cash is up to 74% from 63% in 2010, with a steady year-on-year rise in the number of long-term savers.

The average amount people have in short and long-term savings now stands at £32,407, compared to £30,175 last year, marking a 7% rise.

A “more secure future” was the main reason 40% of those saving for the long-term were putting money away, while emergencies or a “rainy day” is the main saving impetus for more than a third, at 38%, of short term savers.

In addition, the amount of people not saving at a penny has been steadily declining since 2010, as more and more people begin to wake up to the importance of having a buffer in the bank. A growing awareness around the importance of preparing for the long term was particularly marked, with the proportion of people choosing to focus just on this type of saving jumping from 14% to 17% over a four year period.

2010 2011 2012 2013 2014
Saving for the short-term 19% 20% 20% 19% 20%
Saving for the long-term 14% 15% 16% 17% 17%
Saving for both 30% 29% 34% 34% 37%
Not saving at all 37% 36% 31% 30% 26%
Average amount in savings n/a £32,171 £28,772 £30,175 £32,407

 

Despite this year-on-year improvement, the study highlighted that a significant proportion of the nation is still failing to build up a financial buffer, with one in four, at 26%, not saving anything at the moment, and 18% having no savings at all.

A third of respondents, at 33% were aware that they were definitely not saving enough to meet their long-term needs, and 32% admitted they had not saved anything at all over the past 12 months. The study revealed that failing to save was most common among those aged 45-54, with 33% currently not putting any cash aside for the future.

Worryingly, the research highlighted that almost half, at 42%, said not knowing how to go about saving or investing was a barrier to saving, while 23% said they would be inclined to save more if savings options were generally easy to understand.

Commenting on the research David Lascelles, savings expert at Scottish Widows, said: “It has been a watershed year in the savings landscape and the study reflects to some extent the effect that landmark changes have had on people’s mind set. Greater flexibility on savings vehicles including ISAs and pensions as well as reforms to how savings can be passed on provide more incentives to put money away for the longer term.

“The increase in long-term savers suggests more people understand the need to prepare for their financial future, however plugging the knowledge gap will help ensure that people can access the information they need to make the right choices.”

 

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