Are you keeping up with your saving habit? Hopefully the answer is yes, and it seems that more and more people are getting in on the action, with research from Scottish Widows revealing a promising rise in savings levels of all kinds.
According to the figures, 74% of those surveyed put money away in 2014, up from 70% the year before and a vast improvement from the 63% who saved in 2010. The figures also reveal a steady year-on-year rise in the number of long-term savers, with the proportion of those choosing to focus on this form of saving jumping from 14% to 17% over the same four-year period. This highlights a growing awareness of saving for the long term, an assumption backed up by the finding that 40% cite 'having a more secure future' as the key driver behind developing a long-term habit.
A further 20% are saving for the short term – a figure that's remained broadly stable over the last few years – while 37% are saving for both, and happily, there's been a steady decline in the proportion of people not saving anything at all. Just 26% admitted that they weren't saving, a drop of 4% from the previous year and well below the 37% who said the same in 2010, as more people realise the importance of having a financial buffer.
The average amount people have in short and long-term savings is increasing, too, with the total now standing at £32,407. This is a noticeable increase of 7% from 2013 when the average savings pot totalled £30,175, but nonetheless, 18% of those surveyed don't have any savings at all, while 33% admitted that they weren't saving enough to meet their long-term needs.
More to be done
Despite the clear improvement overall, the fact that some people are still unable to save means there's more to be done to encourage consumers to develop a savings habit. Key barriers to saving include not knowing how to go about it – a factor for 42% of those surveyed – while 23% said they would be inclined to save more if savings options were generally easy to understand, suggesting that better communication from financial providers would be a welcome motivator.
Sylvia Waycot, editor of Moneyfacts.co.uk, commented on the findings: "Of course it is good news that saving is becoming a habit once again and that people understand why it is essential to put money aside each month.
"However, along with education about the options available for long-term savers, I would argue that savers' appetite will only increase dramatically once the interest on saving accounts becomes competitive once again. Then savers will feel empowered to make their money work for them, and switching accounts will make a noticeable difference."
So, it seems that information is key for many savers, but so is having a truly competitive account. If you're yet to get into the savings habit then make sure to read our savings guides to help you navigate the landscape, and then it all comes down to finding the right account to suit your needs. This all depends on your goals, so if you're saving for the short term you'll probably want an easy access account, while long-term savers could be better suited to a fixed rate bond. Start comparing the options and see if you can get in on the action.
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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