Optimistic outlook as Britons feel positive about their ability to save

The current savings outlook for Great Britain is more positive than spring last year, with NS&I’s Quarterly Savings Survey showing a 2 percentage point increase in the proportion of people who feel they are more likely to save over the next three months (spring 2014 18%; spring 2013 16%).  Also, the number of people less likely to save has declined from 22% in spring 2013 to 18% in spring 2014.
 
Saving prospects are more positive for men than for women, with 21% of male savers saying they are likely to put money away in the three months ahead, against 16% of women. Encouragingly, younger Britons are feeling optimistic. Of those who are more likely to save over the next three months, 59% are aged 16-34.
 
Savings levels across the country have been rising since summer 2013. Britons are now setting aside £105.43 per month, or 8.21% of their monthly income (6.89% or £87.81 in spring 2013). It appears that people are also becoming better at budgeting, with the number of those admitting to not having any savings declining from 15% in spring 2013 to 13% in spring 2014. However, savings levels have yet to reach the peak of 8.31% of income saved recorded in spring 2011.
 
Another positive trend this quarter relates to people budgeting for the unexpected.  More people say they have enough money in savings to cope with an emergency compared to this time last year (56% spring 2014, 52% spring 2013). Confidence is highest among those aged 55 or over who have a higher value in savings.  Also, the number of people who think they do not have enough savings for emergencies has declined (from 33% in spring 2013 to 30% in spring 2014).
 
Higher value savings are up on last year, with 20% of Britons saving between £10,000-£49,999 in spring 2014 compared to 16% the same time last year. A quarter of those with savings are saving for a specific goal, increasing to 4 out of 10 among those aged 16-34.
 
Out of the quarter (25%) of Britons saving for a specific goal, the top five cited reasons are: holidays and special occasions (40%), home deposits and improvements (35%), in case of emergency (28%), retirement (21%) and a car (20%).
 
Men continue to out-save women, with men now saving 35% more in monetary terms (men £121.54, versus women £89.81).  However, women are now saving a higher proportion of their monthly income than men (8.59% versus 8.04% among males).
 
Julian Hynd, Retail Director at NS&I, said: “We are seeing more positive signs and a better outlook on the national saving picture since last spring, when saving levels were among the lowest in three years. Even with the pressure on household budgets, Britons are putting away more of their income each month, with the average increasing from £87.81 to £105.43. The fact that more people say they have enough savings to cope with the unexpected is very good news.
 
“It is particularly encouraging that those in the younger age group are starting to feel more confident about their immediate saving prospects. We hope this will translate into building a pot of at least three months’ salary for a “rainy day.”

Savers in the South West have recorded the highest percentage of saved monthly income  across the country. On average, those in the South West are now saving 9.16% of their earnings. This is up on last spring, when they were saving only 6.20% per person per month.
 
By contrast, the North East has not seen a recovery in the level of savings achieved.  Savers in this region are struggling the most to match the national savings level (8.21%), with people on average only putting away 6.53% of their monthly income or £73.83. This is down from spring 2013, when they managed to set aside 7.02% of their earnings each month (£81.51).