Britons suffer savings cushion shortage

According to new data from NS&I's Savings Survey, 13% of the population have no savings. The findings highlight that some people are struggling to save money this spring.

Tim Mack, savings spokesperson, NS&I said: "It can be difficult to save and pressures on disposable income often prevent people from setting aside as much as they would like, but there are simple steps people can take to improve their savings habits. This includes looking at outgoings in more detail: why not make a packed lunch each day? With the warmer weather approaching why not cut down on the cost of public transport and walk or cycle to work? See what you save and set up a direct debit putting that amount directly into a savings account. These simple changes will ensure savings quickly mount up, and before long you can have a savings pot growing steadily month on month."

The results reveal that only just over a quarter (26%) of Britons set themselves a savings goal. Setting a specific objective is an important approach to savings and a good way to measure progress. On average, just under a third (32%) of those with a savings goal said they prioritise saving in case of an emergency, a significant shift compared with last quarter when less than a quarter (23%) were saving for this reason. The approaching summer holiday season is another key motivator, with more than a third (37%) of people actively saving to get the necessary finances in place before going away.

For those, who set themselves a savings goal, other savings motivators include:

Saving for a deposit to buy a home (35%, consistent with last quarter)
Saving for retirement (21%, consistent with last quarter)
Saving for a car (21%, risen from 17% last quarter)
Saving for their children's future (19%, risen from 14% last quarter)

On average Britons are setting aside 8.31% of their monthly income every month, equating to approximately £100.24. Men set more aside in pounds (£115.80) than women (£84.84), but only marginally more when proportion of income is taken into account. On average men are managing to save 8.43% of their salary every month compared to 8.19% of women.

At present, more than a third (36%)  of the population do not believe they have enough money to cope in an emergency. Looking ahead, savers are also pessimistic about their ability to save. A quarter (25%) of Britons said they were less likely to save over the next three months. 

Despite savers struggling at present, there is cause for optimism. Encouragingly, 16-24 year olds appear particularly committed to saving money. Two fifths (40% ) say they set themselves savings goals, compared to only a quarter (25%) of those aged 35-44. This younger generation is also more confident in their ability to save in the coming months. 44% of 16-24 year-olds said they are more likely to save in the coming months compared to just 14% of 35-44 year-olds.

Tim Mack continues: "The findings show that it really doesn't matter how old you are or how much money you earn when it comes to adopting good savings habits - it seems that the older generations could learn a thing or two from these younger savvy savers."