Saving for later life is just as important as saving for a rainy day, and happily, it looks as though the message is getting through, with the savings pot of the typical over-55 being double the UK average.
Research from SunLife's annual Cash Happy report shows that over-55s have an average savings balance of £47,237 – double the UK average of £26,180 – while one in five of this age group have a whopping £100,000+ squirreled away.
Savings balances may have dipped in the last year (the average held by over-55s has fallen by 5.2% in the last year, and by 2.25% across all age groups), but it can't be denied that it's still a healthy amount. More people are able to save, too, with 79% of respondents now having savings compared with 74% in the last report, which suggests that the drop in savings balances reflects falling savings rates rather than less money being deposited.
The report went on to reveal that the older age group is more likely to save, with those aged 55+ being 24% more likely to have at least £100 in savings than those aged 18-34. However, this doesn't necessarily mean that they're making the right decisions when it comes to their savings: 30% still keep their savings in a jar or biscuit tin, with a third having more than £100 saved in this way, and one in 10 admitting to having more than £500.
Even those who have a proper savings account may not be making the most of their money. For example, 73% have an instant access savings account (with two-thirds having more than £20,000 in it) while more than half have a cash ISA (57% of those holding between £15,000 and £20,000), and 57% keep their savings in a current account.
The latter option could be beneficial if they're saving in a high interest current account, but if not, their savings probably aren't achieving much in interest. The same could apply with other savings vehicles – unless they keep reviewing their rate to make sure they're on the best deal, their savings could be earning next to nothing. Less than a quarter of those aged 55-65 have a stocks & shares ISA, despite the fact that this kind of account has the potential to achieve far higher returns, so it could be worth considering.
This is particularly the case if you've got long-term goals. While 37% of those aged 55+ are saving for a holiday and 46% are doing so for a rainy day, 56% are planning for their own future by building up their savings balance. This kind of forward planning could be well suited to a stocks & shares ISA, with this form of investing being designed for the long-term.
As long as you're comfortable with the risks and don't put all your savings in this kind of account, it could be a great way to boost your returns for the future. Find out more about stocks & shares ISAs here, and see if you can build your balance even more – whatever your age.
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