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Brits wasting almost £1,200 a year which they know could be avoided

19th August 2014 Print

Over half of Brits (53%) feel they are wasting money each month, according to online research from Standard Life by YouGov Plc. On average, these Brits estimate they are wasting £99 a month, mainly on takeaways (29%), buying lunch out instead of making a packed lunch (29%) and food shopping (28%). Other things they feel they are wasting their money on include mobile phone contracts), digital TV subscriptions and bills and utilities.

18-34 year olds are most likely to feel they are wasting some of their money (67%). However it’s the 25-34 year olds in this group who waste the most money, on average they estimate they squander £129 each month, when they could be smarter with their money. Meanwhile, 55 and overs appear to be most on top of managing their outgoings, on average they believe they waste just £65 a month. 

Julie Hutchison, family finance expert at Standard Life says: “Many of us seem to be quite literally eating away our money, frittering it on takeaways, food shopping that goes to waste or eating out at lunchtime. This could probably be avoided by putting more time aside to plan menus, write food shopping lists and by making packed lunches. Even buying a meal deal lunch every day can cost around £3, which could add up to as much as £60 a month if you do that every working day. If you add takeaway meals and hot drinks to that too, you can see how £100 or more can easily be spent each month. Even freeing up £50 of this can make all the difference when it comes to covering other costs or saving regularly and getting the benefit in the years ahead.”

If people invested the £99 they felt they wasted every month, that could be worth £12,800 after 10 years, in today's money terms allowing for annual inflation of 2.5%.

The research also shows a slight gender divide, with women who feel they waste money more likely to feel they waste it on eating out at lunch time and on food shopping, while men are more likely to think they throw money away on drinks and nights out and bills and utilities. Men on average feel they fritter away slightly more (£104) than women (£95) each month. 

Despite more than half of Brits feeling they are throwing away money each month, less than a third (30%) thought they would review their regular outgoings at the start of the year, with those aged 55 and over nearly twice as likely to do so than those aged 18-24 (33% vs. 18%). 

Hutchison adds: “It’s important that we aren’t left feeling as though we have frittered away our money when we know we could have put it to better use. That’s why it’s worth regularly reviewing our outgoings to make sure we are being smart with our money and getting into the habit of saving what we’ve not spent into a NISA, for example.”

Worryingly nearly a third (30%) of Brits who feel they fritter away money estimate that it amounts to more than £100 a month and some (14%) even estimate they waste more than £200 a month. But two in five (42%) are doing much better than that, wasting up to a maximum of £50 a month.

Five tips from Standard Life to help people ‘save smart’: 

Use price comparison sites for your food shopping and if you do have an occasional takeaway. Sites like My Super Market or Just Eat help you find the best deals.

The earlier you start saving for your future, the more chance your money has to grow. So try to get into a regular savings habit early and remember that every little you cut back on costs can help to boost your savings, whether that’s money you are putting aside for a holiday or for something way in the future like your retirement.

Always hold some money in cash to cover your outgoings (such as your rent, mortgage, food and utilities) and in case of emergencies, before looking to invest for the longer term. Then think about if you’re holding more money in cash than you need to, when you could be investing some of it instead and giving it the potential for long term growth in the stock market.

With interest rates still low, money sitting in a savings account is likely to be losing real value. So if you’re not already doing so, think about whether or not you can invest in stocks and shares for greater growth potential. You can do this within a NISA and which allows you to save or invest up to £15,000 a year.  You have to be ready for some ups and downs with the stock market, but if you’re in it for the long term, there’s more time to benefit from the potential for growth

If you are dipping your toe in the stock market for the first time, then you may want to seek expert help when it comes to choosing which funds to invest in – the Money Advice Service is a good starting point. You may also want to consider risk managed funds that aim to provide you with the best possible return based on the amount of risk you are willing to take. You can find questionnaires online to help you understand more about how you feel about risk.

The value of any investment can go up or down and may be less than was paid in. Tax rules and legislation can change and the information given here is based on our understanding of law and current HM Revenue & Customs practice.