The financial confidence of savers has improved in the second quarter of 2023, with 62% of savers stating that they were confident in their financial position, Paragon Bank has found.

This compares to just 44% of savers in Q1, with 25% of savers lacking confidence in their financial situation in the same period, decreasing to 18% in Q2.

Paragon’s survey of 1,750 savers found that confidence was strongest for those in retirement age, with 69% of those said between 65 and 74 saying that they were confident in their financial position.

This compares to 61% of those aged between 55 and 64 and 56% in the 45 to 54 category.

This increase in confidence has been attributed to a growth in the amount of disposable income available to savers, with 29% of those surveyed stating that they have recorded an improvement in their disposable income in Q2, compared to just 10% in Q1.

Although 35% of savers reported a reduced disposable income in the latest quarter, this is an improvement on the 46% who reported this decrease in Q1.

There is a clear age gap in this statistic reported by Paragon, with 38% of retirees reporting improved disposable income, compared to just 15% of those aged 55 to 64.

Despite the increase in confidence overall, savers are still having to adjust their spending to cope with inflationary pressures, with nearly two thirds (62%) of respondents said that they have used less home energy in the latest quarter, with 45% saying they have reduced the amount of food they buy each week.

Furthermore, almost half (49%) have reduced the number of times they dine out, with 34% stating that they have cut the amount they spend on holidays.

Savings director at Paragon Bank, Derek Sprawling, said: “Despite the high inflationary environment we are living through, both confidence and disposable income improved during the second quarter of the year. This may align with the warmer weather and people having to use their heating less and some costs, such as petrol, starting to come down.

“The improved confidence may also reflect the demographic of the saver population as they tend to be more mature and have a small or no mortgage. With savings rates heading upwards during the period, this means they have been able to generate better returns on their money than in previous quarters.”

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