The Great British Saving Dilemma

Whether it’s saving up for a house deposit, or putting money aside for retirement, saving money is an important part of financial stability. Yet, this is challenging for many people in the UK, especially during periods of high living costs.

In light of this, we surveyed 2,000 people to find out if, and how much, Brits are saving and how much money they have in their savings accounts. We also asked how often they dip into these and their reasons for doing so. We also shared some top tips for Brits who are struggling to put money aside.

How much are Brits saving?

Balancing finances alongside life's many demands can be challenging. Savings can provide a safety net for emergencies and support long-term plans, however, financial circumstances vary for everyone.

According to our survey, Brits have an average of £21,392 stored in savings accounts. Interestingly, over one in ten (12%) report having no savings at all, indicating many are using their pay cheques solely for immediate expenses.

We also found that the amount saved varies significantly by age group. Gen X are the least likely to save, with 16% reporting they have no savings at all.

In contrast, only 3% of the Silent Generation (those aged 78 and above) report having no money in their savings. For those in the Silent Generation who do save, the average amount is £67,069, while for Gen X individuals, the average amount saved is a lot less, at £18,488.

This may be due to Gen X individuals, facing things like mortgage payments, and the financial responsibilities of raising children, which can make it difficult to save. Those in the Silent Generation may have had more time to accumulate savings and might have experienced more stable economic conditions and lower living costs.

23% of Brits have previously taken out a loan to help them cover monthly costs, which reflects the rising cost of living challenges.

The most common reasons Brits are dipping into their savings

There are so many reasons why many of us have a savings account, whether it’s saving for a house deposit, upgrading a car or saving for a big holiday. But what is the most common expense that Brits use their savings for?

The most common expenses that Brits use their savings for

Our survey shows that the most common expense Brits are dipping into their savings to pay for is groceries. The fact that this cost is at the top of our list reflects not only high food prices in the UK, but how this expense is understandably a priority for many people.

Following this are expenses related to children, highlighting the significant financial responsibilities associated with raising a family. Mortgage payments and online shopping are tied for the third position. Paying for bills rounds out the list, highlighting the ongoing challenge of managing routine household expenses.

When we break this down by generation, we see some patterns that shed light on the financial challenges faced by different age groups.

The millennial generation is the one age group that doesn’t follow the trend. For this age group, the most common expense covered by savings is costs related to their children, likely due to the financial strain of childcare and education during early parenting years.

The cities that save money each month for a rainy day fund

A rainy day fund is a reserve of money set aside to cover unexpected expenses. From emergency car repairs to unplanned travel expenses, having a rainy-day fund acts as a financial cushion to help with life’s emergencies.

Our survey revealed that exactly half (50%) of Brits put money aside each month into a ‘rainy day fund’. But how does this differ by location?

The city with the highest percentage of people saving for a rainy day fund is Edinburgh, where three-fifths (61%) of residents say they put money aside for this purpose. This makes sense as people here also save the most of any city, with residents having an average of £47,500 in their savings.

Belfast takes second place, with 57% of people saving money for a rainy day fund, and 55% of people doing the same in Manchester.

Brits most worried about being able to save each month

Saving isn't easy, and it's a concern shared by many Brits. In fact, over half (51%) worry about not being able to save enough money on a monthly basis. This widespread concern highlights life’s financial pressures, from rising living costs to unexpected expenses. Whether it’s managing daily essentials, covering unforeseen bills, or planning for the future, the ability to save consistently is a common challenge. Yet if you’re in a financial position to do so, having a savings pot, especially one for emergencies, such as if your car fails its MOT or your fridge breaks down, can prevent a lot of financial stress, and gives you another option instead of taking out credit.

To explore this further, we looked into which areas of the UK are the most worried about their ability to save each month.

Residents in Norwich are the most worried about savings, with 60% expressing this. This is followed by Newcastle, with 57% agreeing, and Birmingham follows in third place with 55%.

Those aged 35-44 are most worried about being able to save each month, with 69% of this age group saying this. This anxiety may stem from significant financial responsibilities such as mortgage or rent payments, as well as the want to plan for long-term financial goals.

Three tips to help you save

We understand that each person's financial situation is unique, and saving can often be challenging. 55% of households who are worried about rising costs have not taken action to improve their finances. With this in mind, we've compiled a series of tips to help you manage your finances and build your savings. Whether you're just starting your saving journey or looking for ways to boost your existing pot, these following tips could provide helpful guidance.

1. Keep track of your earnings and outgoings

A great way to start saving is to firstly track all your income sources, including your salary, any side earnings, and any other ways you earn money. This will give you a clear picture of your total income. Next, catalogue all your expenses, such as rent or mortgage payments, utilities, groceries, transportation, entertainment, and any other recurring costs. Keeping a detailed record will help you understand where your money is going and identify areas where you can cut back or save.

2. Set realistic savings goals

Once you have considered all the money going in and out of your account each month, you can start to set feasible savings goals. Begin by identifying specific financial objectives and setting realistic targets for each. You can also automate your savings by setting up automatic transfers from your current account to a dedicated savings account, ensuring consistency and reducing the temptation to spend. Saving into a regular savings account could also earn you a higher interest rate.

Additionally, regularly monitor your progress and adjust your savings plan as needed to stay on track and accommodate any unexpected expenses.

3. Review and adjust your budget regularly

Regularly revisit your budget to ensure it aligns with your financial goals and life changes. Make adjustments as needed to stay on track with your savings objectives. By reviewing your budget periodically, you can make necessary adjustments to stay on track with your savings objectives.

The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor.

Methodology

To find out Britain’s savings habits, we surveyed 2,053 people living in the UK. The survey was conducted in June 2024. We also have more information on our Customer Support Hub.