Once all the bills have been paid and essential outgoings accounted for, just how much money do you have to last you until the end of the month? According to research from Scottish Friendly, it could be less than you had a year ago, with the amount of disposable income respondents have left over being notably lower than this time last year.
Less spending – and saving
The figures, from the latest Disposable Income Index (DII), show that monthly disposable incomes have fallen from £278 a year ago to £237 today, equating to around 10.1% of the typical take-home salary. Essentially, this means that people have less money to spend on themselves each month, arguably because the cost of living is continuing to take its toll.
Not only that, but the ability to save regularly also fell, with the report showing a 6% drop in the number of people able to put money aside on a monthly basis. Using Scottish Friendly's figures, this means that 1.8m fewer Brits are now able to save regularly, with the overall figure falling to 25.7m; which in turn means that 24m people are not in a position to save regularly at all.
However, the figures went on to reveal that, while the number of people investing in ISAs fell over the last quarter (cash ISA figures fell by 5%, while 9% fewer people invested in stocks & shares ISAs), the amount of money being put into these products actually increased, quite notably as well: cash ISA deposits increased by 101.1% while investments in stocks & shares ISAs rose by 43%, meaning that on average, £291 is being invested monthly into stocks & shares ISAs and £355 in cash ISAs.
Calum Bennie, savings expert at Scottish Friendly, commented: "It's never welcome news when people's disposable income falls, and it's an especially unwelcome development in the run up to Christmas. However, while it's worrying that the number of savers seems to be on the decline, it is encouraging to see that those who are able to save are putting away more money."
If you find that you're able to save a bit more, it goes without saying that you want the best returns possible. Cash ISAs are still one of the best ways to boost your tax efficiency, and with exceptional rates from challenger brands (such as Al Rayan Bank and Kent Reliance), it could be time to think outside the box.
You could even take it one step further and consider stocks & shares ISAs – these have the potential to secure investors higher returns than if they kept their savings in cash, and as long as they're aware of the higher level of risk involved, these savings vehicles could be worth considering. So, check out our cash ISA best buys and stocks & shares page to see if you can put your disposable income to even better use.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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