Cost of living squeeze puts brakes on savings

One in five savers (21%) have less than £500 put aside, with one in ten (11%) having less than £100 in savings.

In fact, many savers are also having to regularly dip into what savings they have, with a third (34%) having to dip into their savings at least once a quarter according to research from Nationwide Building Society.
 
Nationwide found that although nearly nine in ten people (86%) think saving is important, three in five (62%) people claim they cannot afford to save at all or cannot save more than they already are. One in ten people (11%) do not save at all while over a quarter (27%) do not save on a regular basis.
 
Of those currently saving, half (48%) are taking advantage of the tax-free benefits of a cash ISA. The research suggests being able to access their money as and when they wish may be important to savers with 41% holding an instant access account, but just 9% of savers were prepared to tie their money up in a fixed rate bond despite the fact that such bonds tend to offer higher rates of interest.
 
Darren Bailey, Head of Savings Pricing at Nationwide Building Society, said: “The rising cost of living continues to impact family finances and despite wanting to save, many are finding they just don’t have the spare money.
 
“Yet, even putting a small amount aside each month can produce a decent nest egg which can give families funds to fall back on should they need too.
 
“The needs of each individual saver will differ and it’s important that people find the best account to suit their needs. One of the most important factors for savers when selecting a savings account is being able to access their money as and when they need to with the majority opting for a cash ISA where interest can be earned tax-free.
 
“Although the economic climate may not be ideal for savers, nearly nine in ten people continue to value the importance of putting money aside for a rainy day.”