- Savers fall short as one in five (20 per cent) miss their savings goals
- Average goal is £1,500 but most save over £500 less
- Men twice as likely as women (22 per cent vs. 10 per cent) to count on a bonus to meet their savings target*
- Cost of living cited as number one reason savers miss their target
- UK savers awaits the launch of the NISA on July 1st
As of July 1st, UK savers will see the annual limit on tax-free savings increase to £15,000 as the Government introduces its much-anticipated NISA. However, research from Post Office’s Future of Savings study has found that one in five savers (20 per cent) who set themselves a target will not meet it**, with the average amount saved more than £500 less than anticipated. The research revealed that the average aim among those who have a target was £1,500 – whereas in reality savers only put aside £956 per year.
Despite being unable to meet previous savings goals more than two out of five savers (44 per cent of those with a savings target) have set themselves a more ambitious target than in previous years. This comes despite recent findings from the Post Office and Centre for Economics and Business Research (Cebr) which revealed the amount UK households will have available to save is likely to fall from £3,780 in 2013 to £3,630 this year. ***
Frustrated savers cited the UK’s cost of living as the main reason for not hitting this year’s savings target (53 per cent of those who won’t hit their target) and a quarter (26 per cent) said that they had focused their funds on clearing debt.
Other reasons include additional holiday expenses (22 per cent) and the cost of renovation or DIY to homes (20 per cent). One in ten savers (12 per cent) admitted that they were just not very good at managing their money – this rises to 16 per cent amongst male savers. Perhaps this lack of financial savviness leads male savers to be twice as likely as women (22 per cent vs. 10 per cent) to be dependent on a pay rise or bonus in order to meet their targets.*
Henk Van Hulle, Head of Savings and Investments for Post Office, said: “The launch of the NISA is a great victory for the UK’s savers but unfortunately, the continuing high cost of living means many will struggle to see the benefit come July 1st.
“Despite the economy seeing signs of improvement, families may still need to make drastic adjustments to their lifestyle in order to secure their financial future and make saving part of their day-to-day routine. It is vitally important people review their budgets to see where they’re able to adjust their spending habits. They may also want to take a look at their wider financial planning to ensure they maximise the benefits of saving more free of tax.”
High-earners with incomes over £50,000 rightly expect to have more available disposable income and are also over twice as likely as those on lower incomes to set themselves a savings target; predictably they are also the group most likely to achieve their target (98 per cent). Similarly, London, the nation’s financial capital has the highest percentage of savers willing to set themselves a goal (47 per cent) compared to the North West where only 15 per cent did so. [See notes to editors for table on regional differences].
Henk Van Hulle continued: “Post Office has a range of products to help savers achieve their goals for the short, medium or long term, whether you’re saving for a rainy day, a new car or for university fees for your children. Post Office has also recently launched its Savings Budget Calculator to help potential savers budget and establish what they have to save.”
For more information, please contact:
Post Office Press Office
0207 250 2534/0743 6034 094
*Based on 30 male respondents and 55 female respondents who expect to miss their savings target, results should be seen as indicative only and treated with appropriate caution
**Research carried out by Opinium on behalf of Post Office. 2,001 UK adults were surveyed online between 22-25 April 2014. Results have been weighted to nationally representative criteria.
** Research carried out by Cebr on behalf of Post Office in April 2014.
Percentage of savers with a savings target by region
Yorkshire & Humberside
East of England
The Post Office has a well-established history of winning awards for its popular savings range:
- Best Cash ISA Provider - 2014 Moneynet Awards
- Best Direct Savings Account Provider – Your Money Direct Awards 2013
- Best Fixed Rate Provider – 2012 Moneyfacts Awards
- Trusted Provider – Moneywise 2012
- Best ISA provider for consistency of rates 2012 – Moneywise 2012
- Best Fixed Rate Bond Provider – 2012 Moneynet Awards
- Best Savings Provider – MoneySupermarket Supers Awards 2011
- Best High Street Savings Provider - Consumer Moneyfacts Awards 2011
- Best Savings Account for consistency of rates - Moneywise Awards 2011
- Best Savings Provider - What Investment Readership Awards 2011
- Best Fixed Rate Bond Provider - 2011 Moneynet Awards
- Best Fixed Rate Savings Provider - 2010 Moneyfacts Award
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About the Post Office
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