Most people have less than £500 in savings
Discussion
https://www.bbc.co.uk/news/business-62057301
Some snippets from the article:
"The head of the UK's biggest high street bank told the BBC: "80% of individuals and UK customers and families have less than £500 pounds worth of savings in their current account and their savings account.
"They might have money elsewhere. But what we can see is less than £500. So it's a very important starting point for looking at financial resilience."
But he said half of these customers had increased their balances in the last few years and were in a healthier position than they were before the Covid pandemic."
I can assume that those people are in a healthier position because they may have had chance to save more money due to the lockdowns and restrictions. I know I did.
And as pointed out in the article Lloyds customers may have money parked elsewhere.
I did read on this very forum that the cornerstone of all financial planning no matter your circumstances should be to have at least 3 months worth of living expenses saved up in an instant access account.
I'm possibly an exception as I've always been more of a saver than a spender (or maybe I'm just a tight git).
I do know first hand a lot of people who do live hand to mouth and I know it can be difficult to save money and more difficult still to know what to do with it if you're not financially savvy.
However knowing what some of these people earn and roughly their monthly spending I can't fathom why they can't build a reserve. Even putting a tenner a week away is somewhere to start.
Some snippets from the article:
"The head of the UK's biggest high street bank told the BBC: "80% of individuals and UK customers and families have less than £500 pounds worth of savings in their current account and their savings account.
"They might have money elsewhere. But what we can see is less than £500. So it's a very important starting point for looking at financial resilience."
But he said half of these customers had increased their balances in the last few years and were in a healthier position than they were before the Covid pandemic."
I can assume that those people are in a healthier position because they may have had chance to save more money due to the lockdowns and restrictions. I know I did.
And as pointed out in the article Lloyds customers may have money parked elsewhere.
I did read on this very forum that the cornerstone of all financial planning no matter your circumstances should be to have at least 3 months worth of living expenses saved up in an instant access account.
I'm possibly an exception as I've always been more of a saver than a spender (or maybe I'm just a tight git).
I do know first hand a lot of people who do live hand to mouth and I know it can be difficult to save money and more difficult still to know what to do with it if you're not financially savvy.
However knowing what some of these people earn and roughly their monthly spending I can't fathom why they can't build a reserve. Even putting a tenner a week away is somewhere to start.
Complex one.
I suppose it boils down to the fact we don't all have the same attitude to money. Like yourself I'm a bit of a saver at heart, and I feel genuinely very anxious when my reserves get depleted - as is the case now after a rather expensive few months, and it's a priority to build it back up again.
For some, they simply don't see the value. Easy come, easy go. One life, can't take it with you, and all that old cobblers. Some know full well how to save money and just don't care, others think it grows on trees, others are in such dire financial straits that even putting away a fiver is beyond their reach. I'll admit every now and then I'm almost jealous of it, because I know that no amount of little old me saving a few pennies here and there is going to mean a damn when our inevitable economic judgement day comes - we'll all be in the same boat regardless. But then that wave of being vaguely interesting passes and I realise it has been five minutes since I counted those pennies and I should probably do it again just to be sure.
I suppose it boils down to the fact we don't all have the same attitude to money. Like yourself I'm a bit of a saver at heart, and I feel genuinely very anxious when my reserves get depleted - as is the case now after a rather expensive few months, and it's a priority to build it back up again.
For some, they simply don't see the value. Easy come, easy go. One life, can't take it with you, and all that old cobblers. Some know full well how to save money and just don't care, others think it grows on trees, others are in such dire financial straits that even putting away a fiver is beyond their reach. I'll admit every now and then I'm almost jealous of it, because I know that no amount of little old me saving a few pennies here and there is going to mean a damn when our inevitable economic judgement day comes - we'll all be in the same boat regardless. But then that wave of being vaguely interesting passes and I realise it has been five minutes since I counted those pennies and I should probably do it again just to be sure.
Thin White Duke said:
But he said half of these customers had increased their balances in the last few years and were in a healthier position than they were before the Covid pandemic."
I can assume that those people are in a healthier position because they may have had chance to save more money due to the lockdowns and restrictions. I know I did.
And that means they can carry on building their reserves if they wish to, because they know what they can live without.I can assume that those people are in a healthier position because they may have had chance to save more money due to the lockdowns and restrictions. I know I did.
Percy Cushion said:
Why keep it in a current account and earn no interest? Surely the regular savers are putting their money into an ISA or similar?
If you mean an S&S ISA, most people have no idea what one is. They think an ISA is some cash which gets tax-free interest. Which it does, but at a rate of 3/4 of 5/8ths of f
k all.Puzzles said:
I think it's a bit of a non story.
There's over £118bn saved in premium bonds with the average holding being over £5,500.
That would be some of the remaining 20% then...!There's over £118bn saved in premium bonds with the average holding being over £5,500.
Wheel_Turned_Out said:
Complex one.
I suppose it boils down to the fact we don't all have the same attitude to money. Like yourself I'm a bit of a saver at heart, and I feel genuinely very anxious when my reserves get depleted - as is the case now after a rather expensive few months, and it's a priority to build it back up again.
For some, they simply don't see the value. Easy come, easy go. One life, can't take it with you, and all that old cobblers. Some know full well how to save money and just don't care, others think it grows on trees, others are in such dire financial straits that even putting away a fiver is beyond their reach. I'll admit every now and then I'm almost jealous of it, because I know that no amount of little old me saving a few pennies here and there is going to mean a damn when our inevitable economic judgement day comes - we'll all be in the same boat regardless. But then that wave of being vaguely interesting passes and I realise it has been five minutes since I counted those pennies and I should probably do it again just to be sure.
I buy all of my stuff outright, cars, stuff for my hobbies etc.... Like you I also get worried when I have to spend a lot of money and don't do so again until my reserves are rebuilt. I suppose it boils down to the fact we don't all have the same attitude to money. Like yourself I'm a bit of a saver at heart, and I feel genuinely very anxious when my reserves get depleted - as is the case now after a rather expensive few months, and it's a priority to build it back up again.
For some, they simply don't see the value. Easy come, easy go. One life, can't take it with you, and all that old cobblers. Some know full well how to save money and just don't care, others think it grows on trees, others are in such dire financial straits that even putting away a fiver is beyond their reach. I'll admit every now and then I'm almost jealous of it, because I know that no amount of little old me saving a few pennies here and there is going to mean a damn when our inevitable economic judgement day comes - we'll all be in the same boat regardless. But then that wave of being vaguely interesting passes and I realise it has been five minutes since I counted those pennies and I should probably do it again just to be sure.
One of my friends buys everything on credit - or as he likes to call it "saving in reverse."
I know I can't take it with me, but while I'm here I'd rather have it and not need it, than need it and not have it.
Btw I am not a powerfully built company director if anyone was wondering.
If the source is only looking at current account and savings account with the same bank then too right most have under £500. The better current accounts usually come from banks that pay next to no interest on savings (looking at you First Direct). People with substantial savings know to open accounts elsewhere for that.
colin79666 said:
If the source is only looking at current account and savings account with the same bank then too right most have under £500. The better current accounts usually come from banks that pay next to no interest on savings (looking at you First Direct). People with substantial savings know to open accounts elsewhere for that.
But surely that is the point, someone with substantial savings will have various investments, check the best interest rates etc etc and despite what the PH demographic suggests this is I would suggest a fairly small percentage of the population. If for example you went to the nearest random large factory employing 500 people and asked them whether they had
a) enough to get through to the end of the month
b)£500 saved
c) enough to go without work for a couple of months
d) all the above and buy a new car outright
I would suggest that most of those 500 will be in the a and b categories. Of those with savings I would suggest that they have a savings account with the same bank that their current account is with and use that to pay for holidays and general day to day savings.
The PH demographic is massively skewed towards well paid and financially astute/ interested people (with a healthy amount of BS and bravado mixed in) and I isn't a particularly great representation of the real world..
Some sensible points by n3il above.
For some it comes down to choices and lifestyle too.
We’re in category D (natch) but we have friends who earn very similar, very similar houses etc but have said they’re more B likely due to choices they have made such as his n hers range rovers
Christ knows what their pension pots look like.
For some it comes down to choices and lifestyle too.
We’re in category D (natch) but we have friends who earn very similar, very similar houses etc but have said they’re more B likely due to choices they have made such as his n hers range rovers
Christ knows what their pension pots look like.
So many people who are seemingly well off, ie large house, two cars etc... are perpetually skint, just look how busy the higher end restaurants are at the start of the month compared with the end.
I tried organising a stag do which came to under £500 per person but so many of the group couldn't afford it even though they are in decent paying jobs which was pretty eye opening.
I tried organising a stag do which came to under £500 per person but so many of the group couldn't afford it even though they are in decent paying jobs which was pretty eye opening.
I'd assume there is an element of age adjustment needed in this as well to see what the trends actually are.
i.e.
if you sample 25 yr olds, I would not expect (m)any of them to pass the £500 test. (I know I wouldn't have back then, but I did have an income, a mortgage, a bmw and a couple of credit cards
)
if you sample 75 year olds, I would expect lots (most?) to have at least this level of rainy day savings, with many being quite comfortably off.
Whether that results in >50% overall, I guess it does, but it doesn't tell us much about the whole story imho
i.e.
if you sample 25 yr olds, I would not expect (m)any of them to pass the £500 test. (I know I wouldn't have back then, but I did have an income, a mortgage, a bmw and a couple of credit cards
)if you sample 75 year olds, I would expect lots (most?) to have at least this level of rainy day savings, with many being quite comfortably off.
Whether that results in >50% overall, I guess it does, but it doesn't tell us much about the whole story imho
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