Delving into the UKs savings culture

Think back to when you made your New Year’s resolutions. Was saving more money one of them? If the answer is yes, then you’re part of the third of Brits(1) who made this pledge to themselves on January 1st. However, as is the case with many New Year’s resolutions, the initial drive we have to achieve our goal may soon lose momentum, and the notion of saving more money soon begins to gather dust.

Our survey(2) – which looked into the nation’s saving habits – brought to light the fact that only half of Brits are proud of the manner in which they save. The results suggest that many of us wish we could save more often and more efficiently, but are finding it increasingly more difficult. Alarmingly, our survey also revealed that one in three people in the UK aren’t saving at all. If we know we should be saving, why aren’t we doing it?  

Our research unearthed a common response to this dilemma – a lack of disposable income. The cost of living in the UK is one of the highest in the world(3), so it’s no surprise that three quarters of Brits have revealed that, in the harsh economic environment we’re currently living, they simply don’t have enough money to save. However, while on one hand many are unable to save through no fault of their own, around one in 10 mention they don’t save because they prefer to live in the moment – somewhat overlooking their financial future in the process.

The UK’s approach to saving

According to our survey, seven out of ten people indicate that they self-manage their finances. From making use of traditional methods, to employing the latest technology – each of us tackle the task of keeping track of our financial affairs in different ways.

Method of Saving

% of people in the UK using this method

Online banking


Pen and paper


Excel spreadsheet


Mobile banking apps


Online budgeting & calculation tools


Budgeting apps


An interesting fact highlighted by our research is that while a quarter of Brits find it difficult to save, seven in ten think of themselves as motivated and organised when it comes to doing so, and over half mention that they budget carefully in a bid to have more money to save. These insights, along with the figures above, may be an indication that we could be using better ways to keep our finances in order.

While a large number of people use online banking to manage their savings, only a small percentage are making the most of the money management tools and budgeting apps now available. In the fast-paced world we live in, it can be difficult to make time to sit down and properly revise our finances. These tools and apps can help to save time and stress by tracking spending, and consequently increase our ability to save.

What are they saving for?

Whether it be for a short-term goal such as a weekend away, or a more long-term objective like a deposit for a home, the first rule of putting money aside is knowing what you’re saving for.

Our research identified that, understandably, certain life events and important purchases motivate us to save more than others. For example, four in ten state that holidays inspire them to save – whereas only one in ten save to buy a car.

Approaches to saving are also affected by a number of factors and will vary from person to person – especially those in different stages of their lives. For example, only 3% of those who are over 55 save to buy a house, compared to over half of those aged 16-34. In contrast 46% of over 55s save for home improvements, compared to 19% of 16-34 year olds.

What savings options are available?

If you’re looking for a short-term saving option, you might want to consider a cash ISA (Individual Savings Account), or take advantage of one of the higher interest rate fixed term current accounts available.

Our survey revealed that cash ISAs are used by four in ten people in the UK. The account holder can save up to £20,000 a year tax free and is allowed access to the funds within the term, although interest that has built up will be lost if the ISA has a fixed term. Ready access accounts are also available as cash ISAs, where you can gain instant access to your money – although interest rates are typically lower.   

Current accounts, where 31% of Brits choose to keep their savings, are another option. Some current accounts can actually offer better rates than saving accounts. Similar to cash ISAs, funds in these accounts can be accessed easily and basic tax rate payers can enjoy up to £1000 tax free interest (for higher rate payers the figure is £500. Additional rate tax payers will lose this allowance). 

If, on the other hand, your goal is more long-term, a stocks and shares ISA might be more appropriate. Around one in six people in the UK have chosen this as their preferred method of saving. Although this could be a great way to earn substantial returns on investments, returns on stocks and shares ISAs are based on market performance, so the invested amount could increase or decrease.

With the vast number of savings products available, ensuring your money is in the right place and achieving the best it can is key. The saving route you choose should be based on your individual circumstances and should be the one which best suits your needs at the specific moment in your life. Establishing your financial goals and clarifying what you’re saving for is the first step when deciding to save, and doing your research will help significantly when choosing the right method for you.


(2) The research was run in consultation with Future Foundation and ICM. The findings are based on 5,000 online interviews among a nationally representative sample of UK adults aged 18 and above, carried out in February 2016 and analysed during February/ March 2016.

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