Big changes for small change
Interest rates are still down, but the outlook for savers could be on the way up. That’s the feeling we get having conducted our latest surveys for the Aviva Family Finances Report. It looks as though the typical British family can save more than ever before – but the question we’re still asking, is what are those families now saving for?
Since we started canvassing opinions and gathering data from our six types of typical family, three and a half years ago, the typical amount being saved has risen by £6 to £97 each month. In fact, our report shows the only type of family that’s not as likely to be saving more today, is couples with one child. Here, the percentage of families saving has dropped from 73% to 70% - a small decrease, but perhaps a significant one.
It’s the single and divorced, separated or widowed parents who’ve made rapid gains when it comes to putting money away. Fifty five per cent of single parents are now saving, compared with 50% six months ago; while 58% of divorced, separated or widowed parents now have a savings account compared with 53% six months ago.
Small changes make a big difference
Our Family Finances Report started collating data just three years ago – but in that short space of time, we’ve seen a significant change in savings’ habits. Back in January 2011, 40% of families were saving nothing each month. Just three years later, and the percentage of families saving nothing has now fallen to 30%.
This said, while it looks as though more people are able to put some money away – and there’s obviously a mix of sources for the additional income – the amount of money those families have as a savings cushion is still relatively small.
Just under a third (31%) of all families have less than £500 in savings, although that’s up from 30% six months ago. Nearly half of all families have less than £5,000 in savings.
But it’s couples with no plans to have children who appear to be benefiting most from changes in the economic climate: one in ten in this segment has savings of more than £100,000, compared with five per cent for all family types.
What we hope, is that families right across the spectrum will consider their savings’ plans carefully, and make sure they’re putting a few pounds into their debts and protection needs too – before they top up piggy banks with pennies.
The Aviva Family Finances Report is an in-depth study into the financial needs of the 84% of the UK population who live as part of a modern family. Based on customer profiles and Government data, Aviva recognises the six most common types of modern family as being:
• in a committed relationship with no plans to have children;
• in a committed relationship with plans to have children;
• in a committed relationship with one child;
• in a committed relationship with two or more children;
• divorced/separated/widowed with one or more child;
• or a single parent raising one or more child alone.
Data was sourced from the Aviva Family Index, using responses from over 22,000 people identified as above, via Canadean research. This report looks at not only personal wealth, income sources and expenditure patterns but also tracks how these change across the different types of family unit.
In each edition, Aviva highlights a different topic. This issue has a focus on the lifestyles and working habits of UK families across different generations over the last 50 years. This ‘spotlight’ section uses data compiled from interviews of parents who had their first child between 1965 and 2014, comparing attitudes of 1,103 parents of Generation X (born 1965-1980); Generation Y (born 1981-2000) and Generation Z (2001-2014).