Savvy Brits are selling unwanted items and buying second hand
Almost one in three of those UK adults who are online (31%) are selling their unwanted belongings through the likes of ebay and gumtree to bolster finances, according to research from Standard Life.
The research, which investigates the financial thriftiness of the nation, found that of those who took steps to be smarter with their finances during 2012, an additional 3.5million adults (8%) began selling things they no longer needed for the first time. That increase means that almost a third (31%) of UK adults now use the likes of ebay and gumtree to recycle and make some extra cash.
In addition, more than one in four adults (29%) are buying things like second hand furniture, gadgets, clothes and cars online to save money on purchases.
Commenting, Standard Life's Julie Russell said: "Nowadays we're doing all sorts to be more financially savvy, and selling unwanted items or buying second hand is a great way to recycle and make some extra cash. It is generally a win win for buyers and sellers, but only if you use the money you make or save wisely. That often means paying off bills or saving it for the future, rather than spending it right away.
"When it comes to saving, then making the most of tax breaks and investment potential can be another financially savvy thing to do. We all need our money to work hard for us and the challenge we currently face is that money in a savings account is unlikely to be keeping pace with inflation. So tax efficient alternatives to cash that have the potential to produce greater returns, such as stocks and shares ISAs and pensions, can be really important to our finances.. Of course, investments can fall as well as rise, and people have to weigh that up against the security of cash, the value of which is actually being eroded in real terms. That's why some people seek advice on this."
Who is most likely to be buying and selling online?
The research found that households with children are much more likely to sell unwanted items (41%) than those without (28%). And women are more likely to be cashing in on their old possessions (33%) than men (28%). An even bigger gender gap emerges when it comes to buying - more women (34%) are buying second hand things online than men (24%).
Julie Russell added: "It's interesting to see that households with children are making more use of online selling. They could perhaps have more to sell as children grow up and outgrow their toys and clothes, or want newer and better gadgets. But there's no doubt that bringing up a family can cost a lot and that can be a key factor. There are many things parents can do to boost their family savings over the longer term and help their children when they get older. Money gained by selling old toys could be used to start a tax efficient savings fund such as a Junior ISA, or a pension for your children."
On the whole, the online research found that more than nine in 10 of us (92%) actively manage our money to be more financially efficient, taking up money saving habits such as setting weekly or monthly budgets (31%), reviewing insurance contracts regularly (36%) or going online to find the best deals to save money (48%), as well as buing and selling belongings online.
Last year ebay revealed research that showed the average UK household contains over £1,045 worth of unwanted items that could be sold for cash - such as handbags, mobile phones and laptops. However, a fifth admitted they did so to fund a holiday rather than to save their money for the future. And some 3 million Brits said they never threw anything away, preferring to hoard things at home even if they are no longer of use.
This year's top 5 financially efficient tactics being adopted by UK adults who are online:
1. Don't spend what you don't have and avoid running up debt on credit cards and store cards (56%)
2. Make the most of loyalty cards (50%)
3. Regularly going online to search the best deals (48%)
4. Pay off your credit cards in full each month (40%)
5. Regularly review insurance contracts for the best deals (house, car, contents, mobile etc) (36%)
Top three things people who took steps to be financially efficient in 2012 did for the first time
Not spent what they don't have and avoided running up debt on credit cards and store cards (8%)
Set a weekly or monthly budget for spending (8%)
Sold things they no longer need online. (8%)
Always remember that the value of an investment can fall as well as rise, so you may not get back the money you invest. Laws and tax rules may change in the future. Your personal circumstances also have an impact on tax treatment.
People can find out more about being financially efficient and investments like pensions and Stocks and Shares ISAs at yourfuturemoney.co.uk.