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Media centre /
Press releaseNS&I’S QUARTERLY SAVINGS SURVEY14 December 2005
A climate of lower UK consumer spending, and record levels of personal debt1 seem to have contributed to a peak in savings, according to the latest NS&I Quarterly Savings Survey. Brits have saved the highest monthly amount (£174.43) and the highest percentage of their income (7.16%) in the past three months, since NS&I’s authoritative Quarterly Saving Survey began in September 2004. This has coincided with a fall in spending on the high street suggesting a move away from a “spend, spend, spend” culture towards a “save, save, save” one.
The NS&I Autumn Saving Survey, covering the months of September, October and November, is the fifth issued since the Survey was launched in December 2004, and provides a detailed examination of UK consumers’ savings patterns during the quarter as well as their likely savings patterns in the next quarter. Key Highlights: SAVINGS TRACKER: how have Brits been saving over the past three months?
SAVINGS OUTLOOK: How will Brits save going forward?
SAVINGS COMPARATOR:
NS&I’s view Dax Harkins, senior savings strategist at NS&I commented: “It is extremely encouraging to see so many savings records being achieved. This confirms autumn as a good time to get serious about saving and together with the fact that the majority of people intend to save more over the next 12 months, shows that messages about the savings gap are getting through. Both factors indicate that people have begun to return to a more responsible attitude towards saving, as they see around them the harsh consequences of unmanageable debt. “However, it is concerning to see that the number of regular savers has remained static at 55%. A “savings gap” is emerging between those who are saving increasingly well, and those who are doing very little or nothing at all. Some of this may stem from the fact that record numbers of people are struggling with bankruptcy and personal debts2, but more needs to be done to encourage a greater number of people to save more and save regularly if we are to address this. This is a priority for NS&I.” OLDER AGE GROUPS SUFFERING An analysis of the data illustrates that it becomes increasingly difficult to save as consumers become older, possibly due to the burden of their financial responsibilities. Those aged 45 and over were below the overall UK average for nearly all categories tracked by the Autumn Saving Survey including:
The relatively small gap between the target savings for the older age groups and the national average showed that the saving intention is there, however actual savings continue to seriously lag behind. Dax Harkins, senior savings strategist at NS&I commented: “The poor savings performance amongst older age groups is a worrying trend. Whilst it is understandable that lifestyle factors such as children or mortgage costs will impact on the ability to save, all age groups must be proactive about this in order to address the savings gap.” THE YOUNG STILL BRITAIN’S BEST SAVERS 16-24s or Young and Determined Savers (YADS) achieved another record this quarter maintaining their position as Britain’s best savers. YADS saved the highest percentage of their income in any category in all Savings Surveys to date - 12.62% (previous record – summer survey: 10.11%). YADS also showed a rise in the number of regular savers to a record 60%. Autumn was also a good saving season for those aged 25-35 who put aside the highest mean amount by those saving regularly (£193.64) across all age groups. The number of regular savers also increased marginally from 61% (autumn 2004) to 63% (autumn 2005) – a record for this age group and the largest number of regular savers across all age groups. Dax Harkins, senior savings strategist at NS&I commented: “The consistently strong performance of YADS is a really positive sign for the future. Their clear savings goals undoubtedly contribute to this performance and we hope that these YADS will continue their good savings habits in later life when goals such as saving for retirement are less tangible.” TARGET SAVINGS VS. REALITY: THE “SAVINGS GAP” WIDENS WITH AGE Despite having higher goals, younger savers appear to be much closer to achieving their savings targets than older people. The gap between target and actual savings as a percentage of income widens considerably as you move up the age groups. The table below shows how far off target savings levels the various age groups were this quarter:
Whilst the younger age groups continue to demonstrate good savings habits, it appears the increasing responsibilities of later life such as mortgage payments or children mean that despite increasing earnings, the percentage of income saved drops significantly as we move up the age groups. REGIONAL REVIEW The Welsh were this quarter’s best savers, saving 8.97% of their income on average. The number of regular savers in Wales was also up on this time last year from 64% to 67% - the highest number of all the regions. The worst savers were those in the South East who only managed to save 5.97% of their income and also had the lowest number of regular savers - just 48%. This is down on last year when 52% were putting away an average 6.15% WHY PEOPLE DON’T SAVE MORE A lack of spare income is the top reason given for not saving more. However almost one in five people don’t save more because they either don’t think that they need to or would rather “live for the moment” than save.
ENDS Notes to Editors The NS&I Quarterly Savings Survey: 1. Since September 2004, National Savings and Investments (NS&I) has carried out a Quarterly Savings Survey, examining savings patterns and predictions across Britain to provide a comprehensive analysis of the UK Savings market. 2. The NS&I Savings Tracker examines savings behaviour across GB monthly, to report quarterly on who is saving, how much they are saving, target savings levels, savings objectives, and whether savings are increasing or decreasing. A copy of the NS&I Savings Survey can be obtained by contacting the NS&I media team. 3. The survey of peoples’ savings habits and likelihood to save in the future was carried out by TNS Phonebus among 1520 GB adults aged 16+ between 2nd September 2005 and 9th November 2005. Explanation of footnotes 1. ABI says that average household is £9k in debt on credit cards, overdrafts and unsecured loans (23.11.05). Also Consumer Credit Counselling Service reporting record debt among those seeking its advice. 2. Consumer Credit Counselling Service and DTI reports (November) that bankruptcy numbers are at their highest level since records began in the 1960s. Dax Harkins is available for interview and high-resolution photographs can be supplied. Contact the media team to arrange an interview or request photographs by e-mail.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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