Younger adults leading the way on savings

A potential savings revolution is upon us as for the first time younger savers are over taking the older generation when it comes to getting into the savings habit.  Younger adults (aged 18 - 34) seem to be leading the way banking 16 per cent more than the national average and 25 per cent more than over 55s each month, according to new research from Santander Savings.

Figures from Santander's quarterly ‘Snap Shot' barometer reveal that the average Briton makes a monthly saving deposit of £116, but younger people are raising the bar, putting aside £134 each month. Britons aged 35 - 54 put away an average of £112 each month while those over 55 years make average monthly deposits of £107.

Reza Attar-Zadeh, Director of Savings & Investments commented: "The outlook for savings definitely remains positive with young people really setting the standard.  These latest statistics prove that the recession has changed people's attitudes to saving and a new generation of savers not spenders has finally arrived.

"With the average first time buyer now putting down a deposit of almost £33,000, young people are fast recognising the need to start saving earlier and harder to pull this amount together. The prospect of saving can be a daunting one, particularly for first time buyers, which is why finding the right account is vital. Santander's First Home Saver account offers 5 per cent gross/AER, specifically designed for those to take their first step onto the property ladder." 

Santander's Snap Shot also reveals a clear gender disparity amongst savers, as men continue to save at a significantly higher rate than women, banking over a third more each month. As result, the average male saver now has almost £7000 more held in his savings accounts than the average female saver.

Younger males are the most ardent savers of all, banking an impressive £170 each month, which is 47 per cent above the overall UK average and almost double the amount that younger females are saving (£91 per month). Going forward, it appears that this trend is set to continue, with nearly half (44 per cent) of young people stating that they plan to increase their monthly savings deposits over the next 3 - 6 months.

Snapshot reveals the average UK saver:

Makes monthly saving deposits of £116
Men who save set aside an average of £139 per month
Women who save deposit £91 per month
Will continue to save at this rate or higher (74 per cent)
Has an instant access savings account (59 per cent) or a Cash ISA (43 per cent)

Worryingly, 19 million Britons (39 per cent) are not saving anything at the moment; whilst one in four confess to having no savings to fall back on at all.

Reza Attar-Zadeh, continued: "The past 18 months has demonstrated just how unpredictable the political, economic and financial climate can be, which is why having money to fall back on is so important."

Savings Products

59% have an instant access savings account
43% currently hold a Cash ISA
A fifth have a regular savings account
14% hold a Stocks and Shares ISA
One in 10 (9%) have savings bonds

Alliance & Leicester has recently increased the rate on its Online Saver Issue 7 for new and existing customers.  The account now pays a competitive 2.81 per cent gross/AER (including a 12 month bonus *) with a minimum opening balance of £1,000 and penalty free instant access available online.

For more information on savings from Santander and Alliance & Leicester, visit santander.co.uk or alliance-leicester.co.uk.