Only a few of us have more than one month’s pay in savings

Only a few of us have more than one month’s pay in savings

Only 30% of the UK population have more than one month’s salary in savings – according to a new survey from Paymentsense. Worryingly, the survey also found that 40% have no money set aside in a savings account and no ‘rainy day fund’.

So what are people saving for? The new findings show that 21% make a holiday their top priority. The percentages were lower when it came to long-term saving goals – like buying a house (10%) and retirement (17%). Just 9% of people save for their children’s’ futures, which might include education fees or deposit for a first home.

Top things people save for:
Holidays (21%)
Retirement (17%)
Personal expenses (15%)
Family reasons (14%)
To buy a house (10%)
For my childrens’ future (9%)
To buy a car (8%)
Other (6%)

2/3 own one or more credit cards
The population’s spending appears to be underpinned by rising credit card ownership –
66% admitted they owned one or more credit cards. Meanwhile, 52% of those credit card owners confirmed that they use credit cards to backup expenses. This over-reliance on credit cards is likely to play a part in savings difficulties.

The findings indicate many people weren’t taught to save at all – this may explain the UK’s relatively relaxed attitude towards money. Despite rising interest rates, only 22% of respondents felt very concerned. Meanwhile, another 34% admitted to being slightly concerned about how these increases might impact their monthly outgoings.

How concerned are you about the impact of rising interest rates on your financial commitments?
Slightly concerned (34%)
Very concerned (22%)
Not concerned at all (20%)
Indifferent (19%)
Slightly unconcerned (5%)

1/3 start saving after getting their first job
Paymentsense wanted to find out more about people’s relationship with money, from childhood to adulthood. While the majority of the population struggle to save, 31% said their parents had opened a savings account for them as a child. Conversely, over 1/3 began saving when they got their first job. Meanwhile, 14% waited until they were married or had a family.

When do people start saving?
As a child when parents open a savings account (31%)
After starting first job (31%)
After marriage or starting a family (14%)
When considering retirement (12%)
Other (12%)

Guy Moreve, head of marketing at Paymentsense commented: “There’s no denying it – it’s harder to save now than it’s ever been. As a result, many of us are falling back on credit cards and loans to keep ourselves in the black. It’s essential for consumers to focus more on budgeting. Start small but think big. First, work towards a smaller budget goal – like saving one month’s salary. Then try setting aside two and then three month’s pay. Prioritise expenses and see how far you can go.”

Only 12% of us were taught to save early on
Interestingly, 32% of people were brought up never to spend more than they earned. This suggests that parental advice and guidance is very significant in how well a person manages their money as an adult. Additionally, 23% were taught to take care of commitments and bills before anything else. While tellingly only 12% were taught to save a small portion of their earnings.

And as part of this research, we decided to ask four children about the importance of money.

 

In terms of money, what was the most important thing you learned as a child?
Never to spend more than I earn (32%)
Firstly, always take care of your commitments/bills (23%)
I didn’t learn much about money (14%)
Money comes through hard work (14%)
Always save a small portion of my earnings (13%)
Other (4%)

Paymentsense is Europe’s leading merchant service provider. Established in 2010, they have grown from a small two-person team into a multi-award-winning company and two-time winner of the UKTI Growth Business of the Year Award. Our card machines let you take payments from a fixed location, around the premises or on the move. Our online payment gateway offers cardholders the highest level of security in the industry and our virtual terminal makes over-the-phone transactions a breeze.
** Research undertaken from July 4-5, 2017 amongst 2,000 UK people of all ages.