The improved economic outlook isn't only good for the country at large, but also for individual pockets – and savings levels. People are becoming a lot more positive about their ability to save, according to research from Lloyds Bank, with reduced pressure on disposable incomes meaning an increasing number of consumers are able to put money aside each month.
The latest Lloyds Bank Savings Index has revealed that the number of people who save regularly or whenever they can has increased by 2% over the last 12 months, reaching 67%, and attitudes to saving are improving just as rapidly with 85% of respondents believing in the importance of saving regularly. Of those, 37% strongly agree with the sentiment – an increase of 8% from last year.
Happily, fewer people are needing to rely on their savings to pay off debt, with just 17% of respondents dipping into their savings to prevent going overdrawn – a drop of 3% from the same time last year. People are becoming increasingly responsible too, with 84% choosing to pay off existing debt before saving – an increase of 1% in just three months.
So, just what do people use their savings for? Well, 31% of respondents dip into their savings to pay for a well-earned holiday, while 29% turn to their savings pot to cover an unexpected outgoing. This highlights the importance of not only having easy access to at least a proportion of your savings – instant access accounts are unsurprisingly the most popular choice with 52% of respondents opting for this kind of account – but also of saving regularly to build up a valuable emergency fund.
Instant access accounts offer double the benefit of being able to access your cash whenever you need while allowing you to save little and often. Even putting a small amount into a savings account each month can soon add up, and with instant access versions you can be safe in the knowledge that you can take it out again should you need it later down the line.
However, some people are still finding it difficult to put money away, with 30% of respondents being unable to save anything at all. The biggest barrier to saving is having a lack of spare money – something which affects 40% of those unable to save – with many people finding they need to live from paycheque to paycheque without having any left over.
This could easily lead to a certain amount of apathy when they do have any spare cash, and they may not think it's worth putting such a small amount of money away when there's no guarantee of being able to top it up any time soon. Well, this is an attitude that needs to change – even saving small amounts can make all the difference and can provide a valuable buffer should something unexpected occur, so don't be one of the 28% that would choose to spend rather than save.
"It is encouraging to see a more positive outlook and shift towards savings in the last year," said Andy Bickers of Lloyds Bank. "However, with one in three saying that they're still not saving anything, there is still some way to go. Even if people just put away a small amount each month this can be increased as circumstances improve."
It's all about maximising your saving, and an ISA could be a great addition to your savings portfolio. These accounts let you earn interest entirely tax-free, and happily over half of those surveyed (51%) use a cash ISA to build up their savings pot – while a particularly sensible 78% try to save whatever spare money they have.
The future looks equally as positive, with 65% of respondents expecting to save the same amount or more in the next 12 months. So why not be one of them? Savings levels are on the up and there are still some great deals to be found to make the most of your pot – check out our best buys to see for yourself – and as the economic outlook continues to improve it hopefully means that people could have more disposable income that can be put to good use.
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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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