UK Savings Statistics
According to a recent study looking into UK savings statistics carried out by GOV.UK, approximately 12 million people across the UK took out an Adult ISA savings account between 2020 and 2021 [1].
Whilst this might seem like a lot, this actually 13 million people less than the year before, pre Covid-19 [1].
In fact, During 2020 and 2021, approximately £72 billion pounds were put into adult ISAs [1] which translates to approximately 2.4 billion pounds less than the previous year [1].
However, whilst the number of people opening savings accounts in the UK decreased between 2020 and 2021, the number of people investing their money into stocks and shares ISAs increased significantly by almost 1 million people [1].
However, during 2022 the cost of living started to rise, meaning that less and less people are able to put money into their savings accounts at the end of each month. In fact, almost half of all British people stopped putting money into their savings accounts during 2022.
Of these people, 20% were also unsure whether they would be able to go back to saving as much money as they once did each month once the cost of living crisis is over.
However, if interest rates are set to rise, then less and less people will be able to afford borrowing money, which means that they will need to rely on their savings now and in the future.
Generally speaking, those with savings accounts tend to benefit when interest rates rise. Whilst those who are on fixed savings rates won’t be benefited much, those with other easy access savings accounts will see the benefits of rising interest rates very quickly.
However, this does very much depend on who you bank with and who your savings accounts are with.
If you are currently struggling with your savings and are nearing retirement, then you might want to consider releasing equity from your home. If you think that releasing equity from your home could help, then speak to the team at Equity Release Warehouse.
Please call our 24-Hour Helpline: 0330 058 1579
UK Savings Statistics – How Much Do People Save on Average?
Sometimes, it’s easy to compare yourself to other people. You might look at someone’s lifestyle, car, house or summer holiday and question how they can afford to do all the stuff you want to do, or buy the house you have always dreamt of.
For the majority of people, the answer is simple. The answer is savings.
Whilst some people are able to save the majority of their income, others simply are not. How much of your income you are able to save depends on a number of different factors, including whether you live alone, whether you have any children or whether you have any debt to pay off.
In fact, a recent study carried out by HSBC when looking into UK savings statistics found that a staggering amount of people in the UK sadly do not have their own savings.
In fact, HSBC found that 8.5 million people currently do not have enough savings in their bank accounts to last them a week [2].
On top of this, when looking into UK savings statistics, they found that nearly 25% of all UK adults currently do not have any savings at all, and almost 30% would not be able to pay their mortgage using their savings if they were to lose their jobs [2].
These statistics are not only shocking, but would also be very scary in the face of an economic crisis.
Unfortunately, millions of people and families across the UK really struggle to save their money at the end of each month, with almost 33% of all adults in the UK having just £250 or less money in the savings account [2].
With HSBC looking into this, they found that this would mean that with no savings at all, millions of families across the UK would simply not be able to survive even a week if they were to lose their jobs [2].
The study looking into UK Savings Statistics also found that the average British person spends approximately £954 a month in their monthly outgoings, which includes their rent or mortgage, their bills, their food and any other monthly expenses such as subscriptions to the gym or online streaming platforms such as Netflix [2].
However, with the cost of living set to rise exponentially over the next couple of years as of 2022, these numbers are set to increase a lot.
Unfortunately, these current statistics would mean that just over 25% of all UK adults on the average salary would be forced into applying for benefits [2].
In addition to this, when asked almost 9% of individuals said that they would take to applying for a credit card to see them through the worst of the financial struggles, with 8% saying that they would simply dip into their overdraft [2].
The same study carried out by HSBC which looked into UK savings statistics also found that unfortunately younger people are more at risk during times of economic crisis, as this group are typically the least likely to have any savings at all. In fact, 18 – 24 year olds are most likely to have the least amount of savings and suffer the most, with 33% of this age group having no savings at all.
This age group not only has the least amount of savings, but also spends a lot of money with little income.
However, it is important to remember that a lot of people aged over 55 will have a lot of savings built up in their properties, known as equity.
This is the case for millions of people across the UK who bought their first or second properties in the 1980’s and 1990’s where property prices were considerably lower.
These people are known ‘baby boomers’ and have benefited from the property boom over the past 40 years.
Now, a lot of people across the UK who might be deemed as ‘boomers’ will have a considerable amount of equity in their homes. These people are able to access this equity through equity release loans.
If you are currently worrying about your savings, and would like more information on how to release some of the equity that has built up in your home, then speak to a member of the team at Equity Release Warehouse for more information.
Please call our 24-Hour Helpline: 0330 058 1579
UK Savings Statistics – How Much Did People Actually Save During the Covid-19 lockdown?
During the Covid-19 pandemic, the entire world stopped and closed down. Whilst a lot of people were made redundant and put on furlough during this time, a lot of people were forced into staying indoors and therefore forced into saving their money, too.
In fact, UK savings statistics highlighted that people were able to save the most they had ever saved during the Covid-19 lockdown.
The savings ratio rose to 19.9% from 16% towards the end of 2021, as UK households are placed into yet another lockdown. This was the highest savings ratio in nearly 60 years [3].
In fact, during the Covid-19 pandemic, savings were higher in the south of the country, with people living in Southern English towns and villages saving the most money [3].
However, a lot of these savings are now being put to good use, with the economy contracting shortly into 2021 and a looming recession on the table over the coming years [4].
UK Savings Statistics – Savings & Young People in the UK
Unfortunately, it is becoming harder and harder for young people across the UK to save money. This is because of the increasing cost of living, increasing property market and increasing interest rates. Because of this, it is becoming harder and harder for young people to not only save, but use their savings to get on the housing ladder, too.
Due to this, it is harder than ever for young people to create financial stability for themselves, with the average age of people buying houses across the UK steadily rising.
Unfortunately, people aged between 22 and 29 are now less likely than ever to own their own home, with the number of homeowners in this age group 10% less in 2017 than it was in 2008.
Unfortunately, a recent study which looked into UK savings statistics 53% of people aged between 22 and 29 years old do not have any savings saved up at all [5].
Considering that the parents of these individuals had most probably bought a house by the time they were this old, it is clear that things have changed significantly.
With this being said, it is not a surprise to hear that more young people than ever are currently struggling with financial debt.
Unfortunately, according to the ONS, 37% of all individuals aged between 22 and 29 years old are said to be in debt, excluding any debt from attending University [5].
As you can imagine, as with any age demographic, the amount you are able to save depends a lot on how much money you earn. When it comes to young people, there is actually a huge gap beginning to emerge between the haves and the have nots.
In fact, recent studies looking into UK savings statistics found that the highest earning 10% of young people earnt over 4 times more than the lowest earning 10% [5].
This gap also exists when it comes to the amount that they have saved up, with the top 10% of savers having approximately £15,000 saved up and the lowest 10% barely having £100 saved up in the bank [5].
In addition to this, the gap when it comes to debt also exists amongst this age group. The most people with the highest levels of debt had debt amounting to £14,000, with the people with the least amount of debt owing just £100 or even less [5].
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UK Savings Statistics – Generational Differences in Savings
As you can probably already guess from the information on this page, there are huge generational differences in the UK when it comes to UK savings statistics.
Unfortunately, these means that there is a huge gap between those aged over 55 years old and those who are just starting out. This gap is only set to get worse, with interest rates increasing and mortgage rates making it harder than ever to get onto the housing ladder.
When it comes to UK savings statistics, it is important to look at the differences between age demographics.
A recent study carried out by the Office for National Statistics which looked into UK savings statistics found that for those aged between 25 and 34 years old, they only had between £500 and £5,000 saved up [5].
Although there is a big gap between £500 and £5,000, the study revealed that this depended largely on the extent of their income [6].
Those aged between 35 and 44 years old had anywhere between £5,000 and £12,500 [6]. These statistics were also the same for those aged between 45 and 54 years old [6].
For those aged a little older, between 55 and 65 years old, the average amount that they saved up was between £12,500 and £25,000 [6].
For those aged over 65 years old, the average amount in savings was between £25,000 and £50,000 [6].
When it comes to debt, approximately 38% of people aged between 25 and 34 years old are currently struggling from debt, with over 20% suffering from over £5,000 worth of debt [6].
As you can tell, there is a huge savings gap between younger and older people in the UK. This is why a lot of people across the UK aged 55 or over consider releasing equity from their home, to help their younger family members cope and overcome these struggles.
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UK Savings Statistics – How Much Am I Expected to Save?
More people than ever are worried about what their retirement might look like. Whilst how much you have saved up depends on your previous job and level of income, more people are relying on the state pension to see them through their retirement, due to a lack of savings.
Recent figures show that British people, even those aged over 55 years old, on average are simply not saving as much as they need to in order to see them through retirement.
This is mainly because people are living longer, and therefore are needing more savings to see them through more years and extra care costs as they age.
According to recent data which assessed UK savings statistics, most people feel that a comfortable retirement income is at around £19,000 per person in the UK, which could be a combination of both a state and personal, private pension.
This means that they need to save approximately £7,000 every year in order to achieve this. As we have seen from above statistics, some adults across the UK are currently not on track to do this.
Unfortunately, the state pension does not allow you a lot of income, which is why it is always worth working hard to save up whilst you still work.
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UK Savings Statistics – Average Retirement Income
What is important to remember is that everyone is different. Some people require a lot of money in order to live comfortably, whilst others might not require as much money.
How much money an individual needs depends on a number of factors including their personal set up, whether they have any dependents and their current living expenses.
However, a study carried out by the Office for National Statistics found that between 2018 and just before Covid-19 in March of 2020, 57% of people who were below the state pension age were actively trying to save for retirement by investing their income into private pensions.
Unfortunately, those who were self-employed and living in the UK had significantly less money saved up compared to those who worked for a company and would have most likely been paying into a workplace pension [7].
In fact, one third of all people at retirement age did not expect to receive any other form of pension apart from the state pension [7].
When asked why this was the case, most people cited their low income as the main reason why, with self employed people saying that they simply could not afford to pay into a pension whilst still working [7].
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How Releasing Equity Could Help
If you are currently over 55 years old and are struggling to enjoy your retirement due to a lack of savings, then you should consider equity release.
Equity release is a loan made available by a range of lenders to homeowners aged 55 or over, which allows them access to the equity (the cash) that they have built up in their home.
Equity is essentially the money you pay into your house each month, minus the interest you pay on your monthly mortgage repayments. Your equity also includes the initial deposit that you put down on the house and the value of your house.
By releasing equity from your home, you will receive a tax free lump sum, or a number of smaller payments (known as a drawdown plan) which you will be able to spend however you want to.
Alternatively, you might decide to spend the equity release money on yourself, or on younger family members who might be struggling financially.
There are two main types of equity release schemes across the UK, which are known as lifetime mortgages and home reversion schemes. Which plan you are most appropriate for will depend on your particular circumstances.
If you are currently struggling, then it’s important to talk to someone. At Equity Release Warehouse we offer free, initial advice to anyone who needs it. Our advisers will talk you through the ins and outs of equity release, as well as the best plans that would suit you.
If you would like our help, then speak to our team at Equity Release Warehouse on 0330 058 1579 or by visiting our informative website on www.equityreleasewarehouse.com.
