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Is lack of cash putting your life plans on hold?

Is lack of cash putting your life plans on hold?

Category: Savings

Updated: 03/10/2014
First Published: 03/10/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Key life events are dreamt about for years, but it can't be denied that they're as pricey as they are exciting. Unfortunately, it seems as though the price tag is becoming an increasingly big barrier to reaching these milestones, with lack of cash meaning a lot of people have to put their plans on hold.

According to research from investment platform SCM Direct, a large proportion of 25-54 year-olds are delaying house buying, marriage and even having children because of a lack of savings, and in some cases they're shelving their plans altogether.

The figures show that 22% of 25-34 year-olds have had to delay marriage plans for over two years, while a similar number of 35-44 year-olds (23%) don't believe they'll ever be able to afford a house. Having children seems to be an even bigger concern, with 13% delaying their plans by five or more years, and 8% think they'll never be able to afford to have a family of their own.

This highlights a clear lack of confidence in financial planning, and looking further ahead paints an even bleaker picture: 23% of those surveyed think they'll need to postpone their retirement by 10 years or more, while 13% think they'll never be able to afford to retire.

"The existence of an entire generation of people with life plans on hold is extremely worrying, and demonstrates just how urgently we need to address the poor savings and investment culture," said Gina Miller, founder of SCM Direct. "We have to encourage and educate people into seeing the imperative of looking after their financial futures."

There are several potential explanations for this lack of financial confidence. One could simply be that, thanks to rising prices and a lack of disposable income, the younger generation simply don't have enough available cash to devote to saving for the future. In turn, this could be leading to a "live for the moment" mentality: younger people don't feel confident in being able to meet their future ambitions and feel that setting aside their small amount of extra cash simply won't be worth it, so they spend it on luxuries instead.

This could explain why 29% admit that they're relying on receiving inheritance to achieve their life goals at a later date, which highlights the clear lack of confidence in being able to fund their ambitions themselves. Their feelings contrast starkly with the older generation, too, where 35% of those aged 65+ feel confident that they'll achieve their dreams and ambitions – double the number of 25-54 year-olds.

So, if you're worried about being able to fund your ambitions, just what can you do? Well, the key is to get saving! Even if you can only afford to squirrel away a small amount each month, those small sums could soon add up.

Opt for an easy access account that allows restriction-free additions as well as withdrawals should you really need it, or if you really want to kick-start the savings habit, consider a regular saver that has a set amount you need to put away each month. That way, you won't be tempted to spend your disposable cash elsewhere and could be left with a tidy sum at the end of the year, and if it becomes habitual you won't even notice the amounts leaving your bank account.

Always try to use up as much of your ISA allowance as you can, too, as any interest will be entirely tax-free and could boost your savings balance even more. Remember to think longer-term as well – contributing into a workplace pension should never be overlooked, as it could help ensure you have the comfortable retirement you crave.

All in all, it's time to get started! It may seem disheartening, but the sooner you start saving the sooner you'll have a usable sum that can help fund your life ambitions. That way, hopefully you won't need to delay your plans and could reach your goals quicker, so start searching for the right savings account and get into the savings habit.

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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.