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Are you saving as much as you can?

Are you saving as much as you can?

Category: Savings

Updated: 30/04/2014
First Published: 30/04/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Savings rates may not be setting the world on fire at present but it seems this is not deterring people from putting something away for a rainy day.

The amounts people are saving have surpassed the £100 mark for the first time since last year, according to NS&I's Quarterly Savings Survey.

UK consumers are now saving 8.04% of their incomes each month, equating to £101. This is the third winter in four where savings levels have been above 8% and the fourth consecutive year that there has been an increase in savings from autumn to winter.

If you take a careful look at your expenditure, there are likely to be ways you can cut back. Perhaps you could pack your own lunch rather than eating out, stay in to watch a film rather than heading to the cinema or give up one of those weekend drinking sessions. If you put aside what you save you will soon see it build up.

Let's take a look at what your £101 a week could earn you in some of the accounts currently available…

If you were to put the full £101 into the top paying regular savings account, which is offered by Saffron Building Society and paying 4%, then over the year your investment would be worth £1,234.47 before the tax man takes his 20%. Bearing in mind this is a 12-month bond, you would need to be happy to lock your money away.

If you have a regular income of over £500 then you could consider opening a high interest current account, as these are paying the best rates at the moment. If you left your £101 to build up in the TSB Classic Plus current account paying 5%, you would have built up £1,240.16 before tax by the end of the year, but remember this level of interest is only paid on balances up to £2,000.

Women are outstripping men when it comes to saving, despite possibly having lower incomes, and are saving 8.36% of their wage compared to the 7.84% men are putting away.

Worryingly just under a fifth (18%) of women no longer save anything each month, although this figure is down from 23% this time last year. The same amount (18%) of men are not saving anything but this is up slightly from 17% this time last year.

It's reassuring to see that the amounts people are saving is on the increase but everyone should be saving something – even if it is only a little. The recommendation from experts is for people to try to build up the equivalent of three months' salary as an emergency fund and although this may seem a little out of reach now, you'll be surprised how quickly a small regular deposit will build up.

What Next?

Check the latest top 5 high interest current accounts

Search for the best savings rate for you

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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