How confident are you in your ability to save? Hopefully you've been feeling a bit more optimistic about things of late, with research from Lloyds Bank finding that optimism about saving has steadily improved among respondents since the start of the year.
The latest Lloyds Bank Spending Report shows that overall sentiment towards saving increased notably during the last three months, marking the second consecutive quarter that sentiment has improved. Not only that, but respondents' expectations about their ability to save more over the next 12 months has seen a significant increase, up from 17% to 20% in the latest survey.
The proportion of those unable to save anything at all over the last year has seen a welcome drop, too – 27% of respondents admitted that they haven't saved anything, down from 30% at the previous survey. When looking at those who haven't been able to save in the past month, the figure drops to just 17%, which suggests that although Christmas is on the horizon, spending pressures aren't dampening the savings habit for many.
The greatest improvement in savings trends was seen in the rise in the number of people who are now able to save between £201 and £300 per month, which jumped three percentage points to stand at 11%. However, despite the overall improvement, the average amount saved in the last month dropped from £385.50 to £373.90, but there's still expectation of an even more positive quarter to come.
"It is encouraging to see improved sentiment towards saving, with current levels of saving and expectations of future ability to save both showing promising improvements as this year has progressed," said Philip Robinson, savings director for Lloyds Bank. "It is often suggested that as economic data improves, so does spending, but this latest data indicates the same can be said for saving."
Happily, the survey also found that 63% of people agree that it's important to have savings or investments on top of their pension for retirement, but that hasn't stopped the desire for short-term saving. There was a notable increase in the proportion of people who are saving for something in the short term, climbing from 42% at the last survey to 45% today, but while this means that almost half of saving is for short-term needs rather than long-term goals, it also suggests that people are doing the sensible thing and saving properly for a near-term treat rather than spending recklessly.
This assumption can be backed up with the finding that the use of instant access savings accounts has also seen a notable increase, rising from 44% to 47% in the last three months, which just shows that people are craving easy access to their money – which would typically indicate that they've got a shorter-term savings goal or an emergency fund. Conversely, the use of cash ISAs has fallen by three percentage points over the three-month period to stand at 43%, but while that would arguably be expected outside of traditional ISA season, it could also reflect our own figures of a worsening ISA sector.
However, a particularly notable finding was the fact that high interest current accounts remain a key savings vehicle, with 21% of savers making use of one in the last 12 months. Considering the kind of returns that can be achieved, it's hardly surprising – the top easy access account currently pays a rate of 1.65% yearly, while rates of up to 5% can be achieved with a high interest current account.
Of course, there are more restrictions with these deals (often there's a maximum balance that can qualify for the rate, along with minimum monthly funding requirements), but the potential returns could more than make up for the inconvenience. Putting away even a portion of your savings into one of these accounts could boost your savings confidence even more, and you may even be inspired to save more as a result.
Compare savings accounts
Consider high interest current accounts
Boost your tax efficiency with a cash ISA
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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