Last week Moneyfacts reported on two surveys that revealed the poor state of the UK's savings habits. This week, further research has been released to continue the trend, with the latest Lloyds Bank Savings Index finding that 36% of respondents have less than their monthly income saved and a worrying 31% haven't been able to save at all for the past year.
The Index, based on data from a representative sample of nearly 4,000 consumers, highlighted the low level of savings that UK consumers currently hold. With over a third not having enough to last the month should they lose their income it paints a worrying picture of the nation's finances, and perhaps even more worryingly, over a quarter (27%) of consumers will need to either save less or stop saving altogether over the next 12 months.
It seems that lack of spare income is largely to blame for such poor savings figures, with 43% of those who hadn't saved in the preceding year saying it was because they had no money left by the end of the month. However, it could also be that people have become disillusioned with the savings market thanks to record low interest rates, with 39% believing it's not worth saving.
But, those who had saved aren't necessarily faring better, as over half (55%) had to dip into their savings more than once over the course of the year.
There is a glimmer of hope though, as the number of those who have been able to save remains stable from previous quarters, with 24% of respondents stating that they're able to save regularly. Attitudes towards saving remain similar too, with 88% believing it's important to have a minimum amount saved to be prepared for unexpected costs – but unfortunately just 48% of consumers think they have enough to cover those unexpected outgoings.
"Saving is a challenge, not helped by the low returns on offer, particularly on no notice accounts which are the obvious place to put any money you may need to lay your hands on in an emergency," said Sylvia Waycot, editor of Moneyfacts.co.uk.
"However, one of the key methods for maintaining your savings is really simple and often overlooked. It is simply to remember what you are saving for. If it is a holiday, a car or even a rainy day, try to include the aspiration in the title of the account so you always remember why you are saving and are less likely to impulse borrow from it," she advised.
Find the best avaliable savings rates
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.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.