Saving habits in Britain
Britain’s unhealthy attitude towards personal savings could steer us towards an early retirement crisis. Research from the UK’s biggest peer-to-peer (P2P) lender, Zopa, looked at the saving habits in Britain and has found that Brits are in need of a critical financial health check.
What are we saving for?
Survey findings from YouGov show that whilst Brits think they have a healthy attitude towards money, when it comes to saving for the future, over a third (36%) prioritize their next holiday rather than the long term.
The survey of over 2,000 UK adults shows that saving for retirement is not considered a top priority. In fact, Brits are still longing for sandy shores and far-off places, with holidays topping the list of what we are saving for. And that’s if you save at all, with 1 in 5 (19%) admitting to having no savings product whatsoever.
Britain’s Top Ten Savings Goals:
- Holiday – 36%
- Rainy day – 32%
- Emergency fund – 31%
- Retirement – 26%
- Children – 14%
- Buying a property – 13%
- New car – 12%
- Future repairs – 11%
- Grandchildren – 9 %
- Down payment for a house – 8 %
How are we saving it?
The majority of Brits still hold their savings in traditional savings accounts (59%) despite rock bottom interest rates being on average 0.66% (according to MoneyFacts.co.uk). To make matters worse, the current rate of inflation stands at just under 3%, meaning savings are wasting away and losing the pounds they have saved.
Whilst 8 out of 10 of us say that we have little or no trust in our savings provider, only two in five (43%) of us actually review our savings once a year or less often, and over half (51%) don’t even know the current rate of interest on our savings accounts.
What about retirement?
Worryingly, when asked what Brits are saving for, retirement came in a lowly fourth and saving for a house deposit came last on the list. Whilst over two thirds (69%) of 18-54 year olds believe that they are good with money, only one in five (21%) are actively saving for their retirement. This is despite 81 per cent admitting that they need to save in order to have a comfortable retirement and avoid a retirement crisis.
Snakes and ladders
Zopa have released an interesting little infographic which captures this information in the form of one of our favourite games – the classic snakes and ladders: