How will you save it?

How will you spend it?

How will you save it?

We all know we need to save for the future. But reining in our spending can sometimes feel like an impossible task. We take an in-depth look into Britain’s saving habits, the psychological reasons why we don’t save more and the best way to grow your money according to the experts.

Saving is hard, and it's getting harder

Brits are saving less than ever as wages struggle to keep up with rising living costs and inflation. While it might be difficult to put away money for a rainy day, building up savings offers many benefits, such as financial security, opportunities for the future and less stress.

Self-control bias is the human behavioural tendency that causes us to fail to act in the pursuit of long-term goals due to lack of self-discipline. Money seems to be one area where people are displaying a huge lack of self-control.

Dr Kristina Vasileva, senior lecturer in Finance, University of Westminster

According to the Office for National Statistics, savings as a percentage of household income fell to 4.9% in 2017, the lowest figure since records began in 1963.

Over half of Brits eschew the advice of putting some money aside every month, instead either only saving irregularly or not saving at all.

9% of respondents to our survey said they rarely add to their savings, and 12% said they don’t ever save any money.

While over half of survey respondents have more than £3,000 in savings and 22% more than £20,000, at the other end of the spectrum 9% have less than £500, and 15% have no savings at all.

Learn more about the nation’s saving habits and why we find it so hard to save in our in-depth look at the psychology of saving.

Read more

Growing your
savings can reap rewards

Setting money aside each month can feel like hard work but making an effort now can really pay off in the future. We explore the best ways to control your spending and invest, according to a team of economists, psychologists and finance experts

We can use nudges to help us save. Use a direct debit to automatically transfer a small amount of money on payday to a savings account. Take your ‘small change’, add it up to an annual savings amount and write this down on a piece of paper to help you commit to it.

James Suter, associate director in the behavioural economics team at London Economics

64% of survey respondents said they had not set a budget or created a financial plan for 2018, although 58% said they were likely to make one.

However, the majority of people surveyed expect to add the same amount to their savings this year, and 9% expect to add less.

…if they were more careful with their money. 31% think they could save a bit more money while 19% think they could save a lot more.

But regular savings accounts are far more popular. 60% of people surveyed keep their savings in a bank, while 49% keep them in a cash ISA, despite returns that are often below inflation.

Find out the best ways to trick your brain into becoming a super saver, and learn how investing in stocks and shares can make sure your savings work as hard as you do.

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Figures are based on an online survey, conducted by Atomik Research on behalf of Legal & General, among 2,002 UK adults aged under 65 (18-64). The survey took place between 14th and 16th January 2018. Atomik Research is an independent market research agency that employs MRS-certified researchers and abides to MRS code. Data is available upon request.

How will you spend it?

Whether it’s saving for a trip to Asia, a new car or even saying ‘I do’ – Britain’s saving goals are changing. Find out what the nation is saving for, and the best way to splash your hard-earned cash to generate the most happiness.

Property is out, holidays are in

A rise in property prices, inflation and changing lifestyle trends mean that savings goals are different from previous generations. But what does science tell us about the most gratifying ways to spend our cash after working so hard to save it?

Studies have found that happiness is associated with the extent to which people buy gifts for others or charity, but not for themselves. In short, if you want to be happy, buy things for those you love, rather than yourself.

Dr Thomas Webb, social psychologist at the University of Sheffield

Travel is the third most common expense people are saving for, according to our survey. Only ‘emergencies’ and ‘financial stability’ are higher priorities.

40% of people think saving could help them maintain their lifestyle during retirement while 35% think it could give them freedom to travel.

Saving up to buy a property is less important to people than saving for a new car or travel, according to our recent survey results.

However, 20% of male survey respondents said they’d need more than £200,000 to feel fully financially stable, compared with only 15% of women.

Find out why we’re more likely to save for a holiday than a new home, and how to get the most happiness from your money according to research.

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Figures are based on an online survey, conducted by Atomik Research on behalf of Legal & General, among 2,002 UK adults aged under 65 (18-64). The survey took place between 14th and 16th January 2018. Atomik Research is an independent market research agency that employs MRS-certified researchers and abides to MRS code. Data is available upon request.