The recovery may be taking hold in the economy at large, but the question is, has it started filtering through into your wallet? Hopefully, the answer is yes, but according to research, it could be a tale of two halves.
The latest Lloyds Bank Savings Report suggests that a growing number of people are feeling confident about their savings, with 70% of those surveyed this quarter having been able to put money aside in the past 12 months. This is an increase of 2% from the previous three-month period, showing that confidence – and the ability to save – is steadily improving.
Not only that, but some people are able to stash away pretty impressive amounts. For example, 19% have been able to save £500 or more in the last month, while 10% have squirreled away over £1,000, adding a definite boost to their savings account. In fact, just 16% said that they haven't been able to save anything at all in the past month, down from 20% who said the same in the first three months of the year, while the proportion who have saved something has subsequently increased from 63% to 67%.
As for current savings balances? Well, 22% said that they have more than four times their monthly household income in accessible savings, a healthy balance by any account. The total amount significantly increases with age, with just 7% of those aged 18-24 saying that they have more than four times their household monthly income in savings, compared with 41% of those aged 65+, a finding that's perhaps expected given that older savers will have had several decades to grow their pot.
However, despite savings habits improving, additional research from Markit suggests that things may not be as rosy as they first seem. The latest Markit Household Finance Index shows that household finances have actually worsened in the last three months, and that although the outlook for the next 12 months has improved slightly in the last month, it's still not hugely positive.
This is why it's so important to be in control of your finances at all times, be it through setting a budget or finding the right financial products for your needs, because if you're feeling the pinch it's vital to take charge. Start by comparing utility providers to make sure you're not spending over the odds on all those essential bills, and the same applies if you're seeking to renew your insurance policies.
Rent and mortgage payments will arguably take up the largest chunk of your monthly income, and with research suggesting that the run of low mortgage rates could be coming to an end, it's time to take action! If you're coming to the end of a fixed rate mortgage deal or are sitting on your lender's standard variable rate, consider remortgaging to a low-cost deal to keep your repayments in check.
And, for those lucky enough to have disposable income that they can squirrel away into a savings account, make sure to find the best rates possible. If saving little and often is your method of choice, then you may want to look for an easy access account – or even a regular savings account to really maximise your returns – and don't forget to make the most of your tax-free allowance by finding the top cash ISAs. Whatever you do, find the best deals possible, and hopefully you'll start feeling more confident in the state of your finances.
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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