/ Money

Has the UK lost interest in saving?

A pile of pound coins

New research has found that almost 15m people in the UK aren’t ‘making any efforts to save for the future’, while 8m people have no savings at all. Is the ability to save becoming a luxury?

Research from Scottish Widows has found that nearly a third of us Brits have a total savings pot of less than £1,000. To add salt to the wound, over half of the people surveyed said they’re saving less now than they were two years ago.

The report rings true with the findings from our latest Quarterly Consumer Report, which revealed that in the last month, almost 6m households dipped into their savings just to cover everyday expenses. This is a stark difference to last summer, when the main reason people raided their savings was to pay for holidays.

Dwindling savings

As far as I’m concerned, the lack of savings has little to do with people not ‘making an effort.’ Preparing for the future isn’t easy when there are so many more immediate – and increasing – pressures on your income. It’s hardly surprising that people are struggling to save, given that many aren’t able to cover essential spending each month. In fact, our report found that, last month, four million people took out extra credit, borrowing an average of £381.

And even if you can afford to squirrel some money away, the measly savings rates on offer mean there’s not much incentive to do so.

Families feeling the burden

Our report also found that 2.9m households borrowed money from family or friends in the last month, as people are often lending (or giving) money to their children, sometimes to help them cover daily living expenses. This has meant that a quarter of parents are cutting back on their savings, and almost one in 10 have stopped saving altogether.

I’m one of five children, and I’m all too aware of how reliance on our parents for financial support has affected their ability to save. Helping us through university was and is one of the biggest obstacles to any saving aspirations they might have. Despite my brothers both having part-time jobs to supplement their student loans, they still find themselves having to turn to the bank of mum and dad.

Is offering financial support to family and friends affecting your ability to save? Have you been dipping into savings to cover the cost of essentials?

Anon the mouse says:
6 March 2013

Bills rising by 10-20% per year, wages frozen.
People are now wearing coats in home, because heating your home has become too costly. Lights are left off all night to save on money. The food cupboards are bare as weekly shopping costs are spiralling by upto 50%, of which producers are hiding by reducing the size of products, but keeping the cost the same as the old bigger ones. People are getting food from their parents to make it go far enough.
And then the washing machine breaks (cost £80 to repair), but you can’t afford to fix it, so again parents step in to help until you can afford to.

So please, with not enough money for food, clothes AND shelter, how are we supposed to save?

alan worth says:
6 March 2013

With all the increases in pricing and the decreases in interest rates. Plus the lack of job security under the present government. There is no incentive to save.

richard says:
7 March 2013

There is no point in saving now because interest rates are too low – Money in the Bank DECREASES in value when inflation is factored in – why save for your old age if the government will steal all your assets until you are a pauper directly you are ill – 120,000 OAPs EVERY YEAR are forced to sell everything to pay TWICE for their long term care – once by NI and once from savings – No more “care from cradle to grave” it is now “Care from cradle until you are old and ill” I have released my savings and equity to ensure that I do not pay my hard won savings into the government coffers – I have given it away to those I would have given it to when I died – The transactions were untraceable. It is completely wrong to punish the hard working saver for living – while “other” people are allowed to get the SAME care for FREE.

The pathetic interest rates are putting a lot of people off saving. It is almost time for the annual ISA merry-go-round and I’m really wondering if it is worth the bother considering the small amount of interest and the fact some institutions do not let you add to the amount saved etc.

The fact that those who save for the future end up paying the full cost of home care and are not going to get any benefits from the state in the future does not help the situation. I hear many saying they are going to spend until its gone.

what and let the men at the top get even bigger bonuses i think not