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From everyday living costs, to unexpected bills and life events, it can be hard to save money and avoid dipping into any savings you may already have. Sound familiar?
Here, we share insights into how Brits feel about saving, and the main reasons stopping them from reaching their targets – plus 5 steps to start saving successfully.
The study, carried out by YouGov for HSBC, surveyed 2,002 adults in England, Scotland and Wales.
More than half (55%) of 25 to 34-year-olds are working towards a specific target, which is higher than older age groups.
But, despite their best intentions, younger adults (aged 18 to 34) are also more likely to have to dip into their savings because of overspending (39%).
Women (40%) are more likely than men (32%) to have a savings strategy.
The data also suggests a regional divide. People living in the South West and North East of England were the most likely to have a savings goal (42%), with those from the East of England and Wales the least likely to have a plan (31%).
Overall, 39% of people surveyed say they’ve managed to reach a savings target, with the most common barriers being:
If you have a credit card or overdraft, for example, you’ll typically pay interest on what you borrow (unless you have an interest-free period). If the interest you’ll be charged is greater than the interest you’ll earn through saving, it’s a good idea to prioritise your debt first.
Explore: Should you save or pay off debt?
It can be disheartening when you’re forced to raid your savings for things like a broken boiler or car repairs. As it’s hard to predict if, and when, you’ll need this money – emergencies should always be the first thing you save for.
New to saving? Start with a safety net of £500. You can then slowly build up to an emergency fund (ideally 3 to 6 months’ worth of living costs) for larger financial shocks.
Once you have some money set aside for the unexpected, you can focus on saving for other things – knowing that you have this money to fall back on, should you need it.
You’ll be surprised how saving a little amount each month can soon add up. For example, putting aside £1 every day for a whole year is a saving of £365.
The earlier you start saving, the more time you have to earn compound interest. This is one of the big advantages of putting away a small amount and letting it grow.
While it’s good to challenge yourself, your savings goals need to be achievable to keep you motivated. Setting your goals too high within a short space of time can feel overwhelming.
Our budget planner can help you work out how much you can comfortably afford to put aside each month. Our savings goal calculator can also give you an idea of a realistic timeframe to work towards.
You could set up a standing order to transfer the money straight into your savings account on pay day. That way, you can set it and forget it – your saving habit will take care of itself.
Looking to track your progress? Use our financial fitness score tool now and in the future to compare scores.
When you have a savings goal in mind, it helps to get specific – think about the reasons why you want to save a certain amount. Try to find something that excites and motivates you.
A successful savings goal might look like this:
A couple are looking to buy their first flat, which costs £150,000. They’re aiming to save £7,500 for a deposit. After creating a budget, they agree they can save £300 a month between them. They set a timeframe of 26 months to reach their target. By setting a specific, realistic goal, they have something to look forward to, which makes it all worthwhile.
According to MoneyHelper1, people who set a money savings goal, save faster than those who don’t.
All figures, unless otherwise stated, are from YouGov Plc for HSBC. Total sample size was 2,002 adults. Fieldwork was undertaken between 17th to 20th September 2021. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
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