• Positive outlook for future savings as number of savers increase
• One in four consumers in the UK now save regularly throughout the year
• Nine in 10 consumers appreciate the importance of having a minimum amount of savings
• However, three in 10 savers state they will either cut back or stop saving completely over the coming months
Savers in the UK are feeling less of the strain, as consumer saving continues to stabilise, according to the latest Lloyds Bank Savings Index. The number of consumers able to save is now remaining constant, with 24% of consumers saving regularly throughout the year.
For those able to save, Cash ISAs and Instant Access Savings accounts are on the increase, becoming the most common ways to save. Over half (55%) of those who have saved in the past 12 months have used an Instant Access Savings account, with a Cash ISA falling slightly below (51%).
Money still remains tight …
However, for those who are able to save, more than half (55%) admit to dipping into their savings more than once a year. Paying for a holiday is the most common cause to dip into savings, with 30% admitting to doing so, up from 25% in the last quarter, a higher rise than dipping into savings for Christmas presents. Three in 10 savers will dip into their savings to pay for a holiday, while nearly half of over 65’s are likely to do so.
Other reasons for dipping into savings include nearly one in three (31%) paid for unexpected outgoings from their savings, and one in five have raided their savings to pay for day to day living expenses.
Despite this, having no spare income continues to be the main reason consumers are unable to save over the past 12 months. More than four in 10 (42%) of consumers have no money left over to save, with the over 35’s continuing to drive this trend.
Furthermore, over a third (36%) of the UK’s population has less than their monthly household income saved. This is exacerbated by the 44 years or younger age group that is more likely to have less than one month’s salary saved.
The outlook for savers…
The outlook for future savers is showing an increasingly positive sentiment as the levels of those who say they will be able to save the same or more in the future has increased over the past three quarters, at 63% this quarter compared to 58% six months ago.
The appetite for savings continues remains strong with nine in ten consumers appreciating the importance of having a minimum amount of savings for a rainy day, to protect themselves against unexpected costs or circumstances.
Andy Bickers, Savings Director, Lloyds Bank comments:
“Despite the high cost of summer spending, we are slowly seeing consumer saving starting to stabilise across the UK. It is a positive step that we are continuing to see an increased interest in the importance of savings and consumers utilising savings products. Even if people put away a small amount each month, the best way they can do this is through Cash ISAs where everyone can benefit from tax-free savings.”