Finance / More people 'saving regularly'
More people 'saving regularly'
20 May 2015
More people now feel able to put money into savings regularly, a report has found, in further signs that consumers' finances are improving.
Just over two-thirds (68%) of people have managed to save over the last year, according to the Lloyds Bank Savings Report.
And 44% of people are putting money away at least once a month – up from 37% when similar research was carried out in the last three months of 2014, the report found.
Nearly one in five (18%) people said they have saved £500 or more in the last month.
Cash Isas, which are ring-fenced from the taxman, continue to be the most popular way to save, followed by instant access savings accounts, the research found.
The figures also suggest that many people have built up a sizeable emergency fund, with nearly one in four (23%) people saying they have more than four times their household monthly income in accessible savings.
Nearly half (44%) of people said they save out of habit, while 43% are saving towards a goal such as a holiday or a new car.
Of those who have been unable to save in the past year, around two-thirds (64%) have had no spare cash to do so, while nearly one third (30%) have been putting their money towards paying off a debt.
More than 6,200 people aged between 18 and 75 years old who hold at least one type of savings account were surveyed for the research.
Philip Robinson, savings director for Lloyds Bank, said: “We are seeing a shift in confidence when it comes to people’s ability to save.
“For people who may not be as confident with their current savings habits, it’s important to try and save a small and regular amount each month. This can help to build a strong savings pot over time.”
Despite their improving confidence, savers still face a tough time sniffing out a deal that offers lucrative returns.
The Government’s market-beating “pensioner bonds”, which went off sale last week and paid annual rates of 4% for a three-year deal and 2.8% for a one-year bond, were snapped up by more than a million older savers.
Savers bought more than £13 billion-worth of the 65-plus bonds, making them the biggest selling retail financial product in Britain’s modern history according to the Treasury.
Financial information website Moneyfacts said that in the current low interest rate environment, a “staggering” 138 savings accounts on the market pay a rate of 0.5% or less.
Charlotte Nelson, a spokeswoman for Moneyfacts, said: “Savers now need to shop around to chase down decent accounts and act fast when they find them. Good deals can get oversubscribed really quickly, so it pays to act before the deal is reduced or withdrawn completely.”
Photo from Dominic Lipinski / PA Wire