Britain: A Nation of First Time Savers?

CHESTER, England, August 3, 2011 /PRNewswire/ --

The average age of first time savers in the UK is 25

40 per cent of consumers are not currently saving

A quarter of Brits don't expect they will ever start saving again

The average age people start saving in the UK is 25 years old, according to new research* from moneysupermarket.com. Britain's number one comparison site also found that 40 per cent of Brits are currently not saving, and two fifths of these (40 per cent) have never savedat all.

Those who have never saved at all will only start at an average age of 38, a staggering thirteen years behind the national average of those who already save or have done in the past. Perhaps more worryingly, 64 per cent of people who have never saved said they didn't know when they would be able to start, or didn't ever expect to start saving.

It seems that people have had to reign in their savings to meet their changing everyday living costs, as nearly two thirds (58 per cent) of those currently not saving have managed to put away money in the past. When asked why they had stopped, nearly two thirds (57 per cent) of this group blamed lack of disposable income. In addition, over a third (43 per cent) said they need all their money to pay for everyday living, and a further 18 per cent believe interest rates are too low to save. A sixth (16 per cent) said they were using all available money to pay off debts.

Kevin Mountford, head of banking at moneysupermarket.com said: "It comes as no surprise that with the rising cost of living, large numbers of people feel they have no cash to put aside at the moment. However we really do need to see an attitudinal shift among UK consumers and see regular saving become part of everyday household budgeting. The perceived wisdom is that we should all have between three and six months worth of salary as savings, but clearly in the current climate many will feel that this is out of reach and as a result don't bother trying to save anything at all. However, every little helps, and savers who can only afford to put small amounts aside shouldn't be disheartened, it's all about shopping around and making sure their money is working as hard as possible for them.

"With household budgets being squeezed across the UK, consumers may have to be flexible about how and when they are putting money aside. Simple 'easy access' accounts are probably the best option for first time savers and those taking a 'jam jar' approach to saving, as they can be accessed via a number of different channels and some can be opened with as little as GBP1.

"As a rule, people should always try to avoid dipping into their pots. Those with a tendency to do so may be better off with regular saving product such as a fixed rate bond, where the money is locked away and funded monthly with required deposits typically ranging from GBP20 to GBP250.

"People should beware that many products include a bonus rate of interest, which providers use to attract consumers, and whilst these can provide a hefty rate boost, the benefits can soon be wiped out if they forget to switch once the bonus period has expired. The key is to make a note of the expiry dates and be ready to switch again. With the majority of existing savers sitting on low savings rates, switching accounts could see them enjoy greater returns at a time when banks are fighting for their cash."

Notes to editors:

* Opinium Research carried out a nationally representative poll of 2,013 British adults between 21st to 23rd June 2011.

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Kevin Mountford
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