Brits kidding themselves when it comes to savings

Many Brits may be kidding themselves - believing that the only reason they aren't saving is that they don't have enough money - but in reality if they had the extra cash they still wouldn't use it to start saving, suggests research from moneysupermarket.com.

Research from moneysupermarket.com found that 52 per cent of adults in the UK - 25 million people - said they could not afford to put any money aside each month. These same non-savers agreed that if they had on average an extra £518 income per month then they would be able to start saving.

But when non-savers were asked in a separate survey what they would do with an extra £518 of income a month the answers included holidays, home improvements, buying gadgets and clothes, and nights out. In fact less than half of non savers (46 per cent) said that they would use any of the extra income to start saving.

Of those who claimed they needed more money before they could save, it was the higher earners who require the most to get started. Those earning over £32,000 a year said they would need more than £720 extra per month to start savings, compared with an average of £453 for those earning under £30,000, indicating it is expectations not income which is the real barrier to saving.

Kevin Mountford, head of banking at moneysupermarket.com, said; "Of course there are many people in the UK on low incomes for whom saving is an impossibility. However, saving needs to be a positive decision to put money aside before people start to spend each month. Our research suggests that many people consider savings to be the money left over after they have finished spending, irrespective of how much they earn.

"Saving is not something that comes naturally to many people, it takes discipline and self sacrifice. A good way for people to start saving is to work to a strict budget and see where cutbacks can reasonably be made. Hopefully they will then be able to free up some of their monthly income and allocate it to a savings pot. Even putting away as little as £10 a month is a great start, after five years in a leading regular savings account you would have built up a nest egg of around £640.

"Anyone looking to start saving shouldn't be too put off by the low rate environment. There are still some good products on offer, especially in the fixed rate bonds market, where savers can get over four per cent interest on their hard earned cash."

Britain's best and worst savers

Scots are the least interested in building a nest egg - 11 per cent say they are not interested in saving, nearly twice as many as the national average (six per cent).

51 per cent of Scots said they would love to save, but would require £512 extra income per month in order to be able to do so.

Londoners seem to be the greediest, requiring far more cash before they can start saving, with 50 per cent saying they need, on average, £619 more income per month to start saving.

Britain's most regular savers can be found in the South West and the North West, where nearly one in every two adults (48 per cent) saves every month compared to 38 per cent in Scotland and 37 per cent in East Anglia.

40 - 49 year olds proved to be the least likely to save regularly, with only a third (33 per cent) saving every month, this is also the age range in which most people (62 per cent) feel they can't afford to save.