20% have no savings – don’t be one of them! | moneyfacts.co.uk

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Published: 15/03/2017

Having sufficient savings can be key to financial security, whether you're saving up for a house deposit, retirement or even next year's holiday, and making sure you've got a suitable emergency fund can be just as vital. It's therefore worrying to find that 20% of Brits have no savings whatsoever, potentially leaving millions exposed to financial difficulties should they be hit with unexpected expenditure.

No safety net

Research from Santander revealed that, although the average Brit saves £150 per month, 18% save £50 or less, with 52% wishing they could save more. Ideally, they'd like to save an average of £388 extra every month, yet the fact that so few are able to reach that goal – and that so many have no financial buffer at all – highlights how difficult it can be.

Those who are able to save take a decidedly traditional route, too, with the most popular way to put money aside being a savings account (53%) or cash ISA (27%). Just 12% say they use stocks & shares ISAs, showing that many overlook investing as a way to manage their money, which could mean they're missing out on higher returns.

Indeed, 26% of respondents said they wish they'd been taught more about investments, with 53% wishing they'd received more money advice in general at a younger age. A further 21% wish they'd been taught more about budgeting – something that could make all the difference to your finances – while 19% would have liked more advice on the different savings options available to them.

"Our research shows that although many of us are saving, there is still a significant number who have no savings to fall back on or are not aware of all the options available," said Helen Bierton, head of Savings at Santander. "Developing a savings habit – no matter how small – is so important as it not only provides a safety net but is a way of providing for your future, and those of your loved ones."

Are you good with money?

The research went on to reveal that 78% of respondents believe that being "good with money" is a learned behaviour that anyone can pick up with practice, while only 13% believe that such a skill comes naturally, showing that the skills of good money management really can be learned.

Happily, 64% felt that friends and family would rate them as being good with money, and it seems many have the traits to back up that assumption – 73% of those pay all their bills on time, while 50% seek out offers rather than paying full price, 44% check their bills to see if they could get a better deal and 38% pay off their credit card balance, in full, at the end of each month.

These are all habits that can be invaluable to financial security, and could go a long way to boosting a savings pot – after all, if you manage to save money on your bills or seek out special offers, you could squirrel away even more into a dedicated savings account. This means you could join the 44% of respondents who are looking to increase their financial buffer, or perhaps save for a holiday (34%), pay unexpected bills (26%), top up your retirement pot (22%) or save for a home (14%). Whatever your goals, the key is making your money works as hard as possible.

Make your money work harder

One of the first things you should do is check your savings rates, particularly if you've got a bonus savings account, as rates fall dramatically once a bonus expires. Variable rates on other accounts can change at relatively short notice, too, so if you haven't checked your rate in a while, now's the time to do so – and don't be afraid to look for alternatives if you're getting next to nothing from your current rate.

While having an easy access account will be vital for an emergency fund, there are other options to think about, such as opting for a fixed rate bond to maximise your returns. These pay higher rates than their easy access counterparts on the provision that you lock your money away for a set period, and given that rates have been rising of late, now could be a great time to check out the sector.

As our Best Buys show, you can now secure a return of 2.40% with Atom Bank if you're willing to forego access to your cash for five years, but you can even get an inflation-beating 2.10% with the same provider for a two-year commitment. Alternatively, you may be patiently waiting for the NS&I bond to launch next month, but there are other options you could consider instead.

If you really want to get into the savings habit, a regular savings account could be ideal, and don't forget about ISAs, either – and if you're willing to take a bit of investment risk, why not consider the stocks & shares variety? Stocks & shares ISAs have the potential to offer far better returns than their cash-based counterparts, so if you've got a long-term goal and are comfortable with the fact that you may end up with less than you put in, they could be worth the gamble.

However you decide to go about it, start building your savings pot to generate an all-important financial buffer, and hopefully you won't be one of the 20% with nothing to fall back on.


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