Young motivated to save more in 2011
The first HSBC Savings Map of Britain reveals savers are more ambitious with their savings plans in 2011, contrasting with a difficult 2010.
Britons struggled to increase their overall savings in 2010. Although total liquid savings balance increased slightly in 2010 (source BBA and BSA), the highest proportion of people (40%) withdrew more than they saved, with 23% saying they withdrew over a quarter of what they had saved. In contrast, only 32% added to their savings pot; with just 15% saving a lot more than they withdrew.
Things are looking up however, the majority are more optimistic and ambitious about their savings habits for the coming year with 36% saying they expect to save more in 2011. This is one and a half times the number of people who expect they will save less over the next 12 months (24%).
Younger savers will lead the charge when it comes to savings next year; they are most likely to say they intend to save more over the next 12 months. Those aged between 18 and 24 years old are most likely to intend to save more next year (56%) closely followed by 25-34 year olds (50%). However, in 2010, 34% of 18-24 year olds and 35% of 25-34 year olds withdrew more than they saved.
On the other hand, older savers are more likely to be saving less in 2011, blaming this on the rising cost of living. Over a third (34%) of people aged over 55 say they expect to save less in 2011, while just 22% intend to save more. This age group has been most affected by the economy and low interest rates, with 29% claiming they will save less as they need the money for every day living costs and 12% claim they will save less because interest rates are currently so low.
Richard Brown, Head of Savings at HSBC, comments: "2010 was a difficult time for savers, and it is no great surprise that many people had to withdraw more than they put away into savings over the past year. In contrast it is encouraging to see that the reverse is true for 2011 as intentions to save for the coming year are positive with many planning to set aside more money into their savings pots. With a tough outlook for the year ahead and based on their performance last year however, it will remain to be seen whether these noble intentions materialise!"
Britons choose low risk havens for their money
In terms of where they are saving their money, cautious Brits prefer low risk deposit based savings for the largest proportion of their savings pot, bolstered by the recent rise in the Financial Services Compensation Scheme (FSCS) limit to £85,000. By value over half (55%) of Britain's savings were held in deposit based accounts.
Regional savings habits
Londoners have the highest savings pots (£34,996) while people in Wales have the lowest amount set aside in total savings (£13,332)
People in Wales and Yorkshire and the Humber are most likely to save regularly (39%) while those in the North West and Scotland are least likely (31%).
The Welsh are most likely to save more this year, 41% intend to increase the amount they save in 2011.
People in the East of England are most pessimistic with 29% saying they expect the amount they save to decrease this year.
A third of Brits save regularly
Just over a third (34%) of Britons save regularly, setting aside an average £232 into their savings account each month. Men however, tend to set aside far more than women each month (£271 compared to £190).
Regional regular savings habits
Among regular savers, Londoners make the highest monthly contribution to their savings pot (£268) while those in Wales add the smallest monthly amount (£126).