"It is encouraging to see that people on low incomes and the younger generation are actually some of the best at saving"
Young adults are more likely to be saving regularly than any other generation, according to Aldermore research.
Although they may not be saving the largest amount (an average of £1,160 annually), 74% of 18-24 year olds are saving, compared to the national average of 69%.
18-24 year olds are also managing to save 10% of their annual income compared to 8% for the nation as a whole, who save £1,832 annually.
From a regional perspective, it’s no surprise that London saves more than any other region (on average £2,990 annually), however it appears that a higher income doesn’t lead to people saving a larger proportion of their earnings.
Overall, those who earn more actually save less of their annual salary towards their personal savings than those on a lower income. The research shows that those earning over £40k put away 10% of their income, whilst those earning up to £10,000 a year are managing to put aside 15% annually. However, those on a higher income (over £40k a year) are more likely to save regularly, with over a third (36%) saving on a monthly basis, compared to the national average of 29%.
Nearly a third of people (31%) are still not saving at all, with almost seven in ten (69%) non-savers stating that they simply do not have enough left over at the end of the month. In general, the ongoing low interest rate environment doesn’t appear to have impacted savers, with just over one in ten (13%) saying there’s no point saving anymore because of low interest rates.
Simon Healy, Managing Director - Savings, Aldermore, commented: “Although almost a third of the population (31%) currently do not save anything at all, our new analysis shows that for the majority, the savings message is resonating, despite the low rate environment over recent years. It is encouraging to see that people on low incomes and the younger generation are actually some of the best at saving, the earlier people start savings the quicker and better chance they have of reaching their savings goals in later life.
“However, it’s clear that this can be hard with many people feeling that they are not saving enough particularly at a time when wages are not increasing in line with the cost of living. We hope that we can encourage people to make even a small change in their saving and spending habits, which can go some way to provide protection for the future.
“We would always advise savers to shop around to find the best savings account for their needs – even in a low interest rate environment.”