According to research from Lloyds Bank, the average Brit has around £500 per month in spare cash – and that's after spending on household bills and other essentials, including food and groceries, has been accounted for. Do you have that kind of cash floating around?
Well, according to the figures, seven in 10 of you do. The research found that the majority of full-time workers have at least a quarter of their salary left over for discretionary spending, which, based on the average UK full-time salary of £33,511, means that over three quarters of people have at least £500 spare each month.
For some, the outlook is even better - three in 10 have at least half of their income remaining after clearing household bills and paying for essential items, equating to an average of £1,075, and one in 10 have at least three quarters of their monthly income left at the end of each month. Arguably, a lot of this could be down to very careful budgeting and finding clever ways to cut down the bills, but however it's done, it's clearly working!
It's a fantastic sum of money to have left over, and just shows that, despite many people still feeling the pinch, some could actually be able to accumulate some valuable spare cash – particularly if they're savvy with their money. Looking for ways to cut your household spending, perhaps through seeking discounts on your shopping, comparing energy tariffs and even finding better deals on your insurance policies, can all be put to great effect, and could ideally help you build up your disposable tally.
No matter how you go about it, being left with a bit more cash at the end of the month will not only mean that money won't be quite so tight, but it could give you far more options when it comes to using your money. It also means you've got an important decision to make – do you spend or save?
Hopefully, the answer will be to save it – or at least part of that princely sum. And, happily, it seems that more people are getting into the savings habit, with the survey finding that 68% would be likely to save spare cash if they had any, up from a low of 52% in November 2011.
It's fantastic news, as although that amount of disposable cash could easily burn a hole in your pocket, it's always best to think longer term. If you've been lucky enough to see your disposable income grow in the last few years you'll of course want to treat yourself a bit, but the chance to accumulate so much spare cash is too good an opportunity to pass up.
That £500 a month, when put in a savings account, could quickly build up to a fantastic sum. Not only could you rapidly amass a valuable emergency fund, but big purchases won't seem so far out of reach – you could build up that house deposit in no time at all, or perhaps you're in the market for a new car, need a holiday, or simply want to save for the future.
As well as more people going down the savings route, many are feeling positive about their future bank balances, too. The survey found that a larger proportion of people think they'll have more spare money in the future than less (a balance of +5% was recorded in September 2014, a significant improvement from the -13% in September 2011), the same trend as seen in people's outlook for saving, where the balance between those who believe they'll save more than less is up 11 percentage points (rising from 1% in September 2011 to 12% in September 2014).
All in all, the future's looking bright, and if you're lucky enough to have that kind of spare cash floating around, you need to use it wisely. Sylvia Waycot, editor of Moneyfacts.co.uk, comments:
"The survey points out that being careful with household bills means many people are left with spare money each month. It would be a terrible shame if that money was allowed to just languish earning poor returns, or even no return at all. Planning what you can do with all this spare cash will help you decide what sort of savings account you want and how long you need to save to reach your goal. And the good news is that these days even current accounts offer interest rates that encourage people to save rather than spend."
So why not see what accounts you can find? If you've got a specific goal in mind then a fixed rate bond could be ideal – and you can get up to 3.50% from FirstSave if you're willing to lock your money away for seven years – or if you're looking for a home for your emergency fund, you'll need an easy access account that won't penalise you for withdrawals. Or, a high interest current account could be a great alternative, such as Nationwide's FlexDirect, which pays 5.00% interest on balances up to £2,500. It's all about making your money work as hard as possible, so check out our best buy tables and see if you can put that spare cash to good use…
Find the best savings rates
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.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.