It can understandably be hard for some people to put money aside every month to grow their savings pots, but recent findings show that just under 50% of Brits manage to do so. What's more, Legal & General's research has revealed that one in five rarely or never save, which could see them forced to turn to credit in the event of emergency repairs or unexpected unemployment.
Saving may seem like a big commitment, with plenty of reasons to spend the money instead – from the essential, such as food and housing, to the trivial, such as that delicious cup of takeaway coffee. However, it doesn't have to require much effort. Even setting your small coins aside and depositing them into a savings account once a year could make a difference.
Using credit, on the other hand, could result in much more effort, as unless you manage to get a competitive interest-free credit card and pay off the debt in time you'd have to find a way to pay back more than you've used. And if you're turning to credit due to unemployment, you'd probably continue to rack up debt without any means of paying it off until you get a new job – a risky scenario for anyone to find themselves in.
Despite the risks that come with having no savings, 15% of surveyed 18 to 64-year-olds were in this position, with another 9% having less than £500 in savings and 31% having less than £1,500 set aside. In contrast, 22% said they have more than £20,000 put away in a savings account, which means they're likely well-positioned to deal with anything from emergency home repairs to multiple months without income.
Of course, once you've got a decent amount together, you'll want to move some of your savings from an easy access account for emergencies to products that can offer higher interest rates. A quarter of survey respondents have chosen stocks & shares ISAs as their preferred vehicle; these allow tax-free savings and the potential for greater returns than with a regular account (though you would also be at risk of ending up with less than you put in, depending on how your investments do).
For the risk-adverse, there are also regular fixed rate bonds to consider, or their tax-free ISA counterparts. Regardless of where you choose to put your money, Legal & General's experts point out that saving offers not just financial security, but also opportunities for a better future and less stress. So, even if you manage to put just £10 away in a regular savings account every month, it could make all the difference.
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.