The research looked into the UK’s personal finance habits, and found that although people put away £211 each month on average, a sizeable minority saved or invested nothing at all.
There were also big variations based on age and gender: over the period men saved and invested significantly more than women (£246 a month, compared to £175), and 25-34 year olds put away the most money (averaging £245 a month). They were followed closely by those of retirement age, while younger adults, aged 18-24, put away the least (£141 per month).
Asked why they weren’t saving or investing, respondents said that they feel less incentivised to put money away: 44 per cent said that low returns meant that it was not worth saving in cash.
Ceri Williams, Head of Investor Operations at RateSetter, commented:
“People who traditionally save their money in a cash account are in a difficult position right now: many feel that low rates mean that it’s not worth saving at all, and with inflation comfortably outstripping returns on a lot of products, it’s easy to understand why.”
“However, a significant proportion of people (28 per cent) indicated that they were prepared to take on some risk in order to earn a better rate of return on their money, and that’s reflected in our experience too – we’ve seen a steady rise in the number of people investing via our platform, earning returns of around 4 per cent in exchange for taking on some risk.”
Will things change? Although the majority of adults think that they are not saving enough (50 per cent agree, compared to 17 per cent who disagree), just 21 per cent expect to be able to save more over the next 12 months. There’s a real risk that savers and investors who bury their heads in the sand and fail to put any money away will run into trouble in future.
So how much should you be putting aside each month? Of course, it all depends on your circumstances, but Citizen’s Advice has a good guide here to get you started. And if you want to think big, This is Money’s calculator shows how long you’ll need to save or invest for to become a millionaire.