The UK’s Savings Crisis: How Britons are Losing Out on Thousands of Pounds

Saving money is one of the most important financial habits that can help you achieve your goals and secure your future. However, many Britons are finding it harder and harder to save money amid the rising cost of living and the uncertain economic outlook.

According to a recent study by Savanta, one in four UK adults currently has less than £500 in savings, and two in five have less than £2,000. These figures are well below the recommended level of having at least three to six months’ worth of household expenses in a cash savings account, to cope with any emergencies or changes in circumstances.

Savanta’s study reveals that most Britons are pessimistic about 2024 and do not see any benefit from lower interest rates. They feel the economy is against them and struggle to save amid high borrowing and inflation costs.

Nationwide’s report shows that the number of people with no spare cash doubled from 2022 to 2023. One in five households have less than £100 left at the end of the month, compared to 13% in 2021.

The report blames this on the huge rise in average monthly bills, which increased by 63% from 2021 to 2023. Energy, food and fuel costs soared by over 30%, while mortgage and rent costs rose by over 20%.

Centre for Cities’ report says that the average disposable income per head in the UK has dropped by £10,200 since 2010, due to a lack of productivity growth despite a jobs boom.

These findings highlight the urgent need for action to boost the UK’s savings culture and to address the inequalities in income and living standards across the country. 

Saving money can help you improve your financial situation and secure your future, but it requires planning, discipline and motivation. 

Here are some tips to help you save more money:

  • Set a realistic and specific savings goal, such as saving for a holiday, a car, a house, or retirement. This will help you stay focused and motivated.
  • Track your income and expenses, and create a budget that allows you to save a certain amount each month. You can use online tools or apps to help you with this.
  • Automate your savings by setting up a direct debit or standing order from your current account to your savings account. This will help you save without thinking about it.
  • Choose a savings account that suits your needs and goals, and offers a competitive interest rate. 
  • Review your spending habits and look for ways to cut down on unnecessary or wasteful expenses. You can also look for ways to increase your income, such as taking on a side hustle, selling unwanted items, or asking for a pay rise.
  • Reward yourself for reaching your savings milestones, but don’t splurge too much. Celebrate your achievements and enjoy the benefits of saving money.

Saving money is not easy, but it is possible and rewarding. By following these tips, you can start building your savings and improving your financial well-being.

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