A new independent survey of 2,000 UK adults has revealed how the cost of living is impacting the UK’s savings habits. It found:
- Almost one in five (20%) of those 18-34 have put off saving for their first home
- Overall, 13% have stopped saving for retirement, rising to 19% amongst those 55+
- Just under a third (32%) are worried about losing their job in the current climate
- 48% wouldn’t be able to live off their savings alone for three months or more if their income stopped suddenly
- Uptake of savings products was low; 82% of respondents held no lifetime ISAs, fixed-rate bonds (77%), notice savings accounts (76%), stocks and shares ISAs (73%), cash ISAs (59%), or monthly savers (56%)
Britons are putting their savings aspirations on hold to prioritise their immediate financial security, amid cost-of-living pressures and fears over employment, new research from Chetwood Financial has found.
UK bank Chetwood, which runs the savings brand SmartSave, commissioned an independent survey of over 2,000 UK adults to determine how the current high-inflation, low-growth economic environment is affecting Britons’ saving habits. It found that almost one in five (20%) of those 18-34 have put off saving for their first home, while a further 12% in that group have delayed saving for starting a family or having another child.
The research also found that a concerning 13% of respondents have stopped saving for retirement, rising to 19% amongst those 55+. Other financial milestones that Britons have delayed spanned travelling the world (15%) and moving home or relocating (10%), to delaying marriage or civil partnership (6%).
This comes as almost one-third (32%) are worried about losing their job in the current climate.
When asked about their financial resilience to withstand unemployment, 41% said they would quickly resort to credit cards and loans for financial help due to sudden loss of income. The same number (41%) said they would have to rely on their family and friends for financial support.
Almost half (48%) wouldn’t have enough cash in reserve to live off their savings alone for three months or more if their income stopped suddenly. On average, the largest portion of savers (14%) said they held between £1,001-£5,000 in savings. Similar figures held between £5,001-£10,000 (10%), and £10,001-£20,000 (11%), respectively.
The findings highlight how consumers are shifting focus from saving for milestone life events to their immediate financial health, with 16% stating that they have prioritised paying off debts over saving in the past 12 months.
A further 15% have sought to protect their savings through stricter budgeting, while 12% have opened a current or savings account with a provider that wasn’t a high street bank. However, uptake for different savings instruments was low across the board; 82% of respondents held no lifetime ISAs, fixed-rate bonds (77%), notice savings accounts (76%), stocks and shares ISAs (73%), cash ISAs (59%), or monthly savers (56%).
Sam Compton, Director of Operations at Chetwood Financial, said: “In the current climate, keeping up with day-to-day expenses is an uphill battle for many consumers, let alone saving towards bigger-picture financial goals. Although inflation figures have fallen of late, our research shows that people are sitting tight on saving towards their financial milestones and focusing on their immediate financial health, with the prospect of unemployment a key concern for many.
“Although the figures suggest that most savers have a healthy amount of cash in reserve, it is concerning to see that a significant number of people are putting off saving in crucial areas like retirement or saving for a first home. Whatever their financial goals, savers would do well to make the most of the higher-interest accounts on offer at the moment in order to maximise the value of their savings. In many cases, savers can access better rates by looking beyond traditional high street banks, ensuring that their money can keep pace with inflation.”
About Chetwood Financial
Chetwood Financial (“Chetwood”) is a digital bank which was granted a full UK banking licence in 2018, the only retail bank to obtain a licence that year. Unlike traditional banks, they’re not looking to build a customer base and then cross-sell to them. Instead, they’re focused on serving distinct customer segments that are currently underserved by the market, with innovative products designed specifically for their needs. They do this through consumer led brands, using a business model that is focused on keeping costs low, with state-of-the-art, cloud-based technology and digital distribution partners.
Unlike traditional banks, Chetwood was set up outside of London and uses modern technology to keep costs low, so that they can offer customers market-leading rates and smarter financial products, without gimmicks.
About the research
The market research was carried out between 18th and 26th April 2023 among 2,000 UK adults via an online survey by independent market research agency Opinium. Opinium is a member of the Market Research Society (MRS) Company Partner Service, whose code of conduct and quality commitment it strictly adheres to. Its MRS membership means that it adheres to strict guidelines regarding all phases of research, including research design and data collection; communicating with respondents; conducting fieldwork; analysis and reporting; data storage. The data sample of 2,000 UK adults is fully nationally representative. This means the sample is weighted to ONS criteria so that the gender, age, social grade, region and city of the respondents corresponds to the UK population as a whole.
