How confident are you in reaching your savings goals? According to research from Lloyds Bank, the majority of people are growing in confidence, with 68% of those surveyed having saved in the last 12 months. Were you one of them?
The savings habit appears to be increasingly ingrained, with 44% having saved at least once a month – up from 37% in the last three months of 2014 – with almost one in ten (9%) saving over £1,000 in the last month alone. This doubles to 18% for those who have saved £500 or more, showing that many people are truly taking saving seriously.
Current savings levels also paint a positive picture, with 23% of respondents having more than four times their monthly income in accessible savings. That's certainly a decent emergency fund! As for why people are saving? Well, the top reasons include putting money aside for financial security (60%), saving out of habit (44%), and saving towards a short-term goal, such as a holiday or new car (43%).
Of those who haven't been able to save recently, 64% haven't had enough money left to do so, but 30% used any extra income to pay off debt instead. This is still a wise decision – the interest you'll be paying on credit cards, for example, will far outweigh anything you'll earn in a savings account – and it seems many people realise that fact, with 68% saying that they would rather pay off any debt they owe before saving.
Additional figures from HSBC show that it's younger savers who are leading the way. Those aged 18-30 are saving the highest proportion of their income (24%) compared with other age groups, and they're willing to sacrifice luxuries in order to do so. Perhaps unsurprisingly, building up a house deposit was the top reason to save among this age group, with 35% saving for that purpose.
Debbie Thomas, of HSBC UK, commented: "It's great to see that young people are saving such a large proportion of their income. Getting into a savings habit early pays dividends later on in life, whether it's for a house deposit, a car or even retirement. Customers should look at the different options that can help them save; whether it's a regular saver to keep them on track, an ISA, or saving with someone else, even the smallest amounts saved now can build a healthy nest egg."
While squirreling money away is all well and good, you'll want to make the most of anything you stash away. Receiving interest tax-free is a great place to start, which probably explains why cash ISAs continue to be the most popular ways to save, with 46% of Lloyds' respondents using this savings vehicle. This is closely followed by easy access savings accounts (44%), which are ideal for that emergency fund, while 20% have used a high interest current account to save money in the last 12 months.
This could be a great option, as these accounts tend to pay far higher rates of interest than traditional savings accounts. They typically only pay interest up to certain savings balances, but for those with smaller pots – or who don't mind splitting their savings between several accounts – they could be ideal. Another great option for those looking to get in the savings habit is regular savings accounts, which tend to pay higher rates of interest on the provision that you save a minimum amount each month.
No matter how you choose to go about it, just make sure you get in the habit! Even saving small amounts can soon add up, allowing you to build a decent pot over time, and knowing you've got an emergency fund could boost your savings confidence even more.
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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