We're saving more than we were five years ago
People in the UK are saving more money than they did five years ago, a new survey has revealed.
Brits are saving £98 each month compared to £85 in 2009 and £82 a decade ago, according to National Savings & Investment's (NS&I) Quarterly Saving Survey.
The amount represents 7.76% of peoples' income, while five years ago we were saving 6.42% and 6.70% in 2003.
Fewer people are also saving for a holiday or big occasion as well, with 40% now saving up for something special, compared to 47% in 2007. A third of people (33%) are also saving to buy a house, for mortgage payments or home improvements – a drop from 41% in 2007.
The survey also revealed how our banking habits have changed, with a significant increase in people accessing their banking services online. Three-quarters of us (74%) now manage their money online, compared to just 29% a decade ago.
Conversely, in 2003 75% of us would access their accounts by visiting their branch in person but this has now dropped to just 54%.
Two-thirds of those questioned (65%) said that managing their money online saved them time while 28% said they felt more in control of their finances when they log-on.
Julian Hynd, director of retail at NS&I, said: "Over the last 10 years we saw a switch from customers banking at branches to going online. Over the next decade, we will see smartphone and tablets emerge as a key means for money management as customers look to take more control of their finances while on the move or at a time that is convenient to them."
Patrick Connolly, head of communications at Chase de Vere, added: "It is good news that Britons are saving more of their income.
"The financial crisis has helped some people to understand the importance of having money available for a rainy day. However, the increases are only marginal and as a nation we still aren't doing enough. Too many people still don't recognise the need for long-term savings, naively believing the state or their employer will look after them in retirement, while others are simply unable to save more as their household budgets have been squeezed."
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.