Over the past 12 months, adults in the UK have been saving an average of 7% (£1,798) of their pre-tax income, compared to 8% (£1,832) last year, according to specialist bank Aldermore which recently published its annual Savings Index.
The survey revealed that, despite the average salary being higher standing at £24,732, adults in Britain are only saving on average £150 a month, while just 20% of savers have increased the amount they are putting away. Just under a half of savers have claimed to save the same amount as last year, while one-in-six savers have reduced the amount they put away over the 12 months, an average of £547 less than last year.
Of those who save, 43% stated that they have reduced the amount they are saving because they have little or no disposable income left after all their necessary outgoings. Just over one-in-four said they would rather spend their money on living their life right now, while 20% claimed that there is no point in saving due to poor interest rates. This figure represents a tremendous growth compared to last year (13%), despite interest rates increasing November 2017 for the first time in several years.
The index further found that, even among those that do save, 53% said that they do not feel like they are saving enough. This feeling is particularly prevalent among those aged 45 to 64 as they look to retirement, with 39% feeling like they are not saving enough for a financially secure future.
However, in 2017 it was the younger age group who felt the most financially fragile, but the study found that this year 46% of 18-24 year olds feel like they are saving enough for a financially stable future, rocketing from 29% last year.
Over the past 12 months, 32% of British adults did not save any money, remaining level with last year’s figure of 31%. Those aged between 45 and 64 in particular felt more squeezed, as 36% of their population have not saved anything in the year.
Commenting on the index figures, Aldermore head of savings Ewan Edwards said: “The world of savings can be complex. With so many options available it can leave savers wondering, especially in a low rate environment, what to do with their hard-earned cash.
“It cannot be denied that things continue to be hard for savers, with almost a third of the population (32%) currently not saving anything at all. Our new analysis shows that for many, the importance of saving is understood but even though people are putting some money away, there is a pervading sense they are not saving enough.
“This can be discouraging, but we hope we can inspire people to make just a small change in their saving and spending habits. Even saving little and often can go some way to provide protection for the future and the earlier people start saving, the more chance they have of reaching their savings goals in later life.”
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