How much money do you waste without really thinking about it? The odd takeaway coffee here, an impromptu clothes purchase there, not to mention those cheeky trips to the pub. It can all add up, and research shows that the amount spent on unnecessary purchases could be enough to fund almost half a typical retirement.
That's according to online investment site True Potential Investor, whose study found that the average Brit wastes £143 per month on purchases they later regret – including unnecessary food purchases, alcohol, clothes and going out – equating to £4.70 per day. However, for those under-35, the monthly total ramps up to £173.80, while over-55s appear to be more careful with their expenditure, regretting purchases worth just £70.52.
For those still saving for retirement, however, those wasted purchases could prove to be an even bigger hammer blow to their finances, with calculations showing that, if £4.70 a day were invested into a pension from age 30 to 65, it would translate into almost £320,000.
This could fund 13 years of comfortable retirement – based on the assumption that £23,000 is what Brits typically believe is the minimal annual requirement for a comfortable retirement – and once basic rate pension tax relief is added, the figure rises to £399,000, enough to fund 17 years of retirement.
This highlights how wasteful unnecessary purchases can really be, with the disposable funds available for potential savings going straight down the drain. Even forgoing that £7.99 bottle of wine a week could generate £96,653 in retirement funds if invested into a pension over 35 years, while cutting out the £2 daily caffeine fix could add an extra £169,000 to the pot.
True Potential managing partner David Harrison commented: "What this research shows is that with minimal effort, it is possible to save up a significant sum of money and live very comfortably in later life.
"The problem is that people believe you can put off saving for years, so that by the time they start saving properly for retirement, it requires painful choices. But start early and as our figures show, switching a few pounds now that you later regret spending into saving could enable you to retire early and live more comfortably."
So don't squander all that cash – put it in a pension instead, or consider a stocks & shares or Lifetime ISA as a long-term saving alternative (just make sure you're comfortable with the risks of stocks & shares investing). Even squirrelling it away in a cash savings account could pay off in the long run as you watch your pot grow, so stop spending and get saving!
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.