Millions of us are having to cut back to make ends meet this year. But many savers are now choosing to deny themselves milestone moments, such as major holidays, weddings and home renovations, to keep putting money aside, according to Gatehouse Bank.
Its survey asked respondents to classify themselves as spenders or savers. More than 80 per cent of people who consider themselves to be ‘spenders’ still put money aside each month, with building a nest egg for the future as their main motivation.
However the amount savers feel they need to squirrel away varies markedly depending on age.
Cutting back: Many savers are now choosing to deny themselves milestone moments, such as major holidays, weddings and home renovations, to keep putting money aside
Many were cutting back on big events such as major holidays, weddings and home renovations.
Almost half of savers aged 55 to 60 were willing to forgo these to be sure of having enough to cover future essentials such as household bills and nice-to-have items, even if they have savings in place.
By comparison, many 18- to 24-year olds would feel secure if they were able to afford only basics, without leaving room for one-off costs, such as a car breakdown.
‘The data indicates a promising increase in those who focus on saving,’ said Ravi Kumar, at Gatehouse Bank, a shariah-compliant UK lender set up in 2007. He notes that one in three adults – equating to 14 million people – view their monthly savings as an essential outgoing.
‘However, the generational gap on financial security remains, showing clear scope to develop healthy savings habits amongst this age group.’
City watchdog the Financial Conduct Authority warned last year that three in ten adults did not have a savings account of any type.
As a rule of thumb, you need at least three months of essential outgoings in a rainy day savings account to allow for events such as redundancy or ill-health.
