The inaugural UK Savings Week runs 26 September to 2 October 2022
With a third of people relying on their savings to get by, UK Savings Week aims to help those who can get into a better savings habit.
The rising cost of living is putting significant pressure on many households’ finances, however over the coming years, UK Savings Week aims to get people engaged with saving, whether they are already savers, have no savings but could save a little, or may be unable to save right now but may be able to when times improve.
New research from the Building Societies Association (BSA), reveals that the average person has £17,356 tucked away in savings. However, as always average figures conceal the gap between the ‘haves’ and the ‘have-nots’, with one in seven (13%) saying they have no savings at all and a third (33%) of savers saying if they lost their income they wouldn’t have enough savings to cover their living costs for even just one month.
Over a third (36%) of savers said that they are relying on their savings to get them through the cost-of-living crisis and more than half (55%) have reduced the amount they used to save, meaning financial resilience is diminishing every day for many people. More worryingly, over a third (35%) have stopped saving altogether as a result of the crisis.
Despite the financial pressures caused by the rising cost of living, it is encouraging that almost two thirds (64%) of those with no savings said they could save £10 a month, which could help these individuals to build a safety net for an unexpected cost. Creating a regular habit is often the best way to start saving, even if the amount saved flexes depending on other expenses in the month.
With so many people currently relying on their savings, it’s probably never been more important to find the best deals available, however there is currently more than £260 billion1 in accounts paying no interest. This is not surprising as the research found that around one in four (23%) savers don’t check the interest rate paid before they open an account, with a third (33%) never comparing the rate on their savings to other accounts available.
There are however some savvy shoppers out there, with one in three (30%) saying they have switched to accounts which provide cashback rewards, bonuses or have lower fees.
Iona Bain, financial commentator and founder of Young Money said:
“Having a regular savings habit can provide a safety net when things go wrong. Even a small rainy-day pot to fall back on when an unexpected bill lands, can provide security and reduce worry in difficult times.
“But savings are not just for the unexpected bad stuff. A growing savings pot can help achieve future dreams and aspirations, whether that’s saving for a special occasion, a new car or a new home, or to cover a regular expense such as Christmas presents.
Andrew Gall, head of savings and economics at the BSA commented:
“Whilst the midst of a cost-of-living crisis might seem like an odd time to launch activities encouraging good savings habits, those who are able to save can benefit from building their resilience to future shocks.
“When, how and how much people save will be different for everyone and UK Savings Week aims to help individuals to save their own way, when they can. And for those who are already savers, UK Savings Week aims to help people think about making the most of their savings.”