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Why singletons make great savers

Why singletons make great savers

Category: Savings

Updated: 13/10/2010
First Published: 13/10/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

People in a relationship could learn a thing or two about saving from their singleton friends, new research has revealed.

Despite the common-held assumption that married or cohabiting people are better savers than their single counterparts, new data from National Savings and Investments (NS&I) suggests that the opposite is actually true.

Over the past five years, singletons have consistently been better at saving a larger percentage of their income than their loved-up counterparts, mainly because single people set themselves short-term savings goals and act on them.

NS&I found that single people set themselves higher savings targets, aspiring to save 18.07% of their income each month, compared to just 14.71% for married and cohabiting couples, and they are successfully achieving these goals by saving more of their monthly income.

"More than two thirds (69%) of singletons say they are strongly motivated to save because they know they don't have anyone else to rely on financially," said Tim Mack, NS&I savings spokesman. "In comparison, 41% of married or cohabiting people say they only rely on their partner for advice on savings and money management."

With nearly a third (31%) of singletons claiming they are more likely to save in the coming three months, compared to just 16% of those people who are married or cohabiting, the research suggests that the current trend is set to continue.

But as Tim Mack adds: "With nearly a quarter of married or cohabiting savers admitting they don't think they have enough money to cope in an emergency, it may be a good moment for couples to look to single savers when considering how to set aside a larger percentage of their income."

Whether you're single or in a relationship, there is never a better time to get into the savings habit than right now.

Savings products are available to suit all wants and needs. If you want instant access to your money, savings accounts such as the NatWest e-Savings account, which pays 2.89%, and the Halifax Web Saver Extra, which pays 2.60%, are ideal.

Alternatively, if you think you'll be able to stash your cash away and leave it untouched for a certain period of time, then fixed rate bonds usually pay an even better rate of interest. For instance, Barnsley Building Society's One Year Fixed Rate Bond offers a rate of 3.05%, while Santander's Two Year Fixed Rate Bond can pay up to 3.50%.

Meanwhile, cash ISAs, such as the Halifax Cash ISA paying 2.80% and Birmingham Midshire's Cash ISA Extra paying 2.70%, help protect your savings from the clutches of the taxman. If you're able to live without your money until 31 December 2011, Barnsley Building Society's Online Fixed Rate ISA pays 3.00%.

Setting aside differences between those who are in a relationship and those who are not, NS&I also found that the number of people regularly setting money aside has increased to more than half of the population for the first time since winter 2007/08.

In terms of pounds and pence, the average amount the population is setting aside each month is £87.37, up from £85.21 in the spring. At least the singletons who are putting this amount aside each month know they will have enough money to pay for the wedding when the right person does come along!

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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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