• Over a third (34 per cent) of working Brits have a month or less salary saved
• 14 per cent of people have no savings whatsoever
• Over a quarter of lower earners are not saving any of their salary.
• Those who do save, put away £310 a month on average. The average savings pot is £10,468.06
Over a third of Britain’s workforce has less than month’s salary in savings, new research from Neyber has found.
The study, carried out among 10,000 UK employees, found that almost one in seven (14 per cent) of working Brits have no savings whatsoever.
This savings shortfall means that many people in the UK would be unable to cope with an unexpected income shock, such as divorce, bereavement, redundancy or illness.
Heidi Allan, head of employee wellbeing at Neyber, said: “With so little money to fall back on, something as simple as a car repair could leave people struggling to cope.
“It is critical that people have some way of paying for smaller things like unexpected bills, as well as protection policies in place for bigger problems such as losing a job, otherwise small income shocks could lead to Britain’s workers spiralling into debt.”
The research found that most Brits had experienced difficult situations in the past two years. These ranged from mental health issues (18 per cent) to divorce (14 per cent), serious accidents (8 per cent) and job loss (19 per cent).
Despite this, many Brits have no immediate plans to address their lack of savings. Almost a fifth (18 per cent) are not setting aside any of their monthly earnings.
For lower earners (those with salaries between £10,000 and £19,999) that figure is far higher, with 26 per cent of people saving nothing whatsoever out of their wages.
Those who do save were putting aside £310 a month on average. The 65+ group saved the most, putting aside £350 a month, while 45-54 year olds saved the least, putting aside just £282 a month.
The average pot among those who do save is £10,468.06.
The most common way to save was in a bank or building society - over half of the 10,000 people surveyed saved in this way. But just under a quarter of people had savings in a jar at home.
Different ways of saving
A bank or building society savings account 52%
A pension 39%
A personal ISA 34%
A savings jar at home 23%
I don’t regularly save / Not applicable 23%
Stocks and shares plans 13%
A credit union 5%
A company or employer ISA 4%
An employer-sponsored savings account 4%
Top tips for managing money
With almost a fifth of people not saving any of their monthly income, Neyber’s Heidi Allan has identified seven top tips for getting on the savings ladder.
Seven top tips for saving
1) Set up a standing order - Put savings in a separate account from everyday money, it will stop you dipping into your savings for impulse buys or on a night out
2) Find the right savings account for you – important things to consider are whether you will need to access your money in the near term, the interest rates on offer, and any penalties if you take your money early
3) Name your accounts – if your saving account is called ‘holiday fund’, psychologically you’re less likely to dip into it, because you’re more likely to make the connection that money now means less spending money while you’re away.
4) Have clear objectives – knowing what your goals are and how much you need to put away makes it far easier to achieve than just thinking ‘I should save more’
5) Be realistic with what you want to achieve – just like New Year’s Resolutions, if you bite off more than you can chew, you’ll fall at the first hurdle. Think reasonably about what cut backs you can make and come up with achievable goals
6) Be realistic with your timescales – you’re probably not going to go from saving nothing to saving £1,000 a month, but if you can manage £20 a week, you’ll save well over £1,000 in a year.
7) Be open and communicate – It can be really frustrating when you’re trying to cut back but friends and family are tempting you out on expensive days out or for nice dinners. Tell people if you’re saving for something big. They might be too, and even if they aren’t they’ll understand and it makes it easier to suggest lower-budget activities.
Neyber’s full report – the DNA of financial wellbeing – can be found here.
Ends
For more information or for a .pdf version of the Report, please contact: Kay Phelps, PRinHR, M: 07710 043244 or kay.phelps@PRinHR.co.uk
About Neyber
Neyber is a multi-award-winning financial wellbeing provider that helps UK employees to be better with their money. It partners with employers to support their workforce’s financial wellbeing with access to affordable, salary-deducted loans, financial education insights and a range of savings and investment products – all at no cost or risk to the employer.
Its vision is to build a community of employees who can confidently deal with money and have access to fairer finance when they need it.
Neyber has been included in KPMG’s 2017 global list of the top 100 fintech companies, recognised as Ethical Financial Services Provider of the Year at the Money Age Awards and became the first alternative lender to be accredited by the Lending Standards Board. It has been recognised as one of the top 50 most disruptive companies in the UK by Real Business and won “Benefits Innovation of the Year”, at the Workplace Savings and Benefits Awards in both 2016 and 2017. Neyber is also the Financial Wellbeing provider to the winner of the Employee Benefits Awards’ “Best Financial Wellbeing Strategy”.
Neyber was founded by former Goldman Sachs investment bankers Martin ljaha and Monica Kalia along with financial technology expert Ezechi Britton. The founders joined together to deliver a genuine alternative to the solutions offered by financial service providers whose high borrowing rates and low returns on savings have helped to create an unprecedented era of financial stress. Clients include the UK Police Service, London City Airport, Anglian Water, NHS Trusts and FTSE listed firms.