British savings at all-time high
The British people have never saved more than they do today, according to new research.
The news may come as a shock as rates on saving accounts stagnate but a survey by NS&I shows Britons are now putting aside just over 8% of their monthly income, £104 in real terms – the highest amount recorded by the quarterly survey.
Figures show the younger generation are trail blazing with 25-34 year olds saving 9.29% of their incomes, and those recorded as having goals saving on average £39 each month more than those without.
On top of the average level of savings increasing, NS&I found the number of people not saving at all each month has decreased from a quarter to a fifth – and that 35-44 year olds were the worst savers.
John Prout, NS&I retail customer director, said: "The research suggests most age groups in Britain are saving more and this corresponds with an increased use of savings goals from last summer, which can only be an encouraging sign for the future."
He added that the main drivers for saving in recent years has been to join the property market, for a holiday or in case of an emergency.
"Setting saving goals can help savers gradually build their pot to save for a particular long-term targets and our research suggests that setting a goal enables savers to save an extra £39 each month," he said.
NS&I, the government-owned investment group, has carried out the savings survey quarterly since 2004 – and found saving levels have now increased for the third quarter in succession.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.