Do you have enough savings to achieve your life goals? According to research from Munnypot, most people's savings levels fall far short of expectations, with the average Brit facing a shortfall of a whopping £50,000.
Arguably, much of the issue could be that expectations are far too great to be realistic, with the average respondent saying they'll need a whopping £83,542 in their savings pot by 2022 – just five years away – in order to achieve key life goals. Unfortunately, their current savings levels won't even bring them close to this target, as with the average Brit saving less than £200 a month, they could end up over £50,000 short.
Not only that, but 27% of people have no existing savings to start from, and 32% admitted that they saved nothing at all last year. A further 26% saw their savings pots actually shrink in 2016, with many withdrawing more than they put in, so even those who save regularly may be struggling to increase their pots. Indeed, just 34% were able to boost their balance last year, highlighting the difficulty many people could face in reaching their goals.
Despite this, the majority (76%) of respondents said they want to save more each month, while 78% said they'd prefer to achieve their goals using their savings rather than relying on credit. The will to save is clearly there – not counting the 24% who said saving was "pointless" because of low interest rates – but it seems that it's sometimes easier said than done.
"There's a clear mismatch between what people want and the reality of what their saving behaviour will deliver," said Simon Redgrove, co-founder of Munnypot. "The combination of rising living costs and low interest rates have driven a 'savings shortfall' that many of us are likely to fall victim to.
"With interest rates stuck at record lows and most savings accounts returning next to nothing, it's hard for beleaguered savers to see the light at the end of the tunnel. To reverse this, we desperately need to make saving attractive again, [such as by] finding new ways to make our money work harder."
The top five goals respondents were saving towards are a dream holiday, a deposit for a first home, a new car, home improvements and a nest egg for periods of unemployment, but whether those or any other life goals are on your radar, the key to achieving them is to start saving!
Hoping to reach the £83,000 mark in the space of five years may be wishful thinking for many, but that doesn't mean you can't take a good crack at it. All it could take is a bit of proactivity. As research from Royal London found, monitoring your spending could be the key to better budgeting, helping you identify areas you can cut back in and encouraging you to save that extra cash instead.
Just make sure you've got the right savings account in which to deposit those excess funds. You'll want to achieve the best returns possible, and if you'll be adding to your pot on a regular basis, a regular savings account could be the way to go. These accounts typically pay more than their easy access counterparts on the provision that you stick with your deposits, and could be a great option for those wanting to kick-start their habit.
Other accounts could work just as well depending on your needs, so check out our savings Best Buys to get one step closer to reaching your goals.
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.