According to a recent study conducted on 2,000 adults, the average ‘comfortable’ adult in their sixties saves £237 per month for nonessential ‘big ticket’ items, such as holidays and new cars. The research also highlighted that individuals in their fifties prioritize saving for retirement while keeping some disposable income for later in life.
In contrast, individuals under 40 tend to save for more practical purposes, setting aside just under £300 per month for house deposits, new furnishings, and starting a family. However, the study revealed that nearly one in six adults have faced difficulties in saving due to the impact of the Covid-19 pandemic.
Furthermore, 35 percent of respondents admitted that their savings have now become a backup fund in case of income loss, rather than being allocated for a specific purpose. The uncertain economic climate has led adults in their thirties to save money as a precautionary measure in case they lose their jobs, while those in their forties are saving for unexpected income reductions.
Maitham Mohsin, head of savings at Skipton Building Society, emphasized the importance of financial stability during these challenging times. He mentioned that while some individuals are fortunate to save more due to reduced expenses like commuting and entertainment, many are concerned about their financial well-being and are saving every penny as a precaution. He also highlighted the positive aspect of the study, indicating that most British adults exhibit sensible savings behavior despite the pandemic.
Surprisingly, the research revealed that adults in their twenties also display a ‘save don’t spend’ attitude towards their finances, contradicting the common belief that younger generations do not save. Individuals in their twenties allocate funds for weddings and start saving for a baby in their thirties. Compared to older age groups, younger adults tend to have specific goals in mind when saving, with those in their twenties saving an average of £308 per month and those in their thirties saving £295.
The study indicated that only four in ten individuals over the age of sixty regularly save for a specific purpose and are less likely to maintain multiple savings pots simultaneously. Adults in their thirties tend to save for future-oriented investments such as furniture, garden rooms, or moving houses, although they also have an interest in fashion items such as clothing and shoes.
The survey conducted by OnePoll also identified that the most challenging periods for saving include a reduction in household income following the birth of a child (23 percent) and unforeseen house-related issues (20 percent). Other factors that hinder saving plans over time include shopping addiction (nine percent), accepting lower-paying jobs (12 percent), and having a partner who stopped working (seven percent).
Maitham Mohsin concluded by emphasizing the importance of saving for retirement at an earlier stage in life, rather than waiting until the fifties. While acknowledging that other priorities such as buying a home and getting married often take precedence during younger years, he highlighted the difficulty of building a sufficient pension pot for a comfortable retirement if saving begins later in life. Skipton Building Society encourages adults of all ages to consider saving for retirement sooner rather than later, ensuring a secure financial future.