- 18-24s are twice as likely to save in a jar than over 55s
- A fifth of over 55s have £100K or more in savings
- 40% of 18-24 year olds have no savings
Despite the numerous savings and investment options available, almost a third of us still use a jar or tin to save – the fourth most popular method, according to research by SunLife.
The five most popular ways of saving are:
- Instant access account
- Current account
- Fixed rate savings/cash ISAs
- A jar/tin
- Premium bonds
SunLife also found that contrary to popular belief, it is not little old ladies that are most likely to be stuffing their money in the biscuit tin; younger people are actually much more likely to save in this way, with almost half (43%) of 18-24s saving in a jar compared to less than a quarter (24%) of over 55s.
Those with the smallest amount in savings (£100-£500) are the most likely to save in a jar (43%) or in their current account (47%) with relatively few holding premium bonds (7%), notice savings (1%) or equity ISAs (2%).
However, almost a fifth (18%) of those with £100k or more still use a jar to save, alongside other savings methods, the most popular being fixed term savings (83%) with more than half holding savings in stocks and shares ISAs (58%) and premium bonds (56%).
Of those that do save, £26,785 is the average amount held but this is skewed quite heavily by the over 55s who have almost five times the savings (£49,833) that 18-44s do (£10,436) and almost double the average amount held by 45-54s (£28,651).
Life stage also makes a big difference to savings – on average, young families (children under 11) have £11,470 in savings compared to older families (kids aged 12-18) who have £33,960, while empty nesters have the most - £48,266 on average.
What are we saving for?
The most common reason for saving is ‘my future generally’ which is the case for 62% of savers, while ‘a rainy day’ is the next most popular reason with 44% stating this is why they’re putting the pennies away. A third are saving for their retirement, but this rises to 44% for over 45s, and drops to just 11% for 18-24s.
|My future generally||62%||76%||65%||60%||58%||62%|
|A holiday/ holidays||33%||30%||29%||28%||33%||38%|
|My children's future e.g. help them get on the property ladder etc..||15%||12%||14%||15%||13%||17%|
|Family event e.g. wedding||7%||11%||11%||4%||7%||7%|
|School/ university fees||6%||11%||6%||9%||8%||2%|
Worryingly, more than a quarter of us have no savings at all. The majority say this is because they don’t have any spare cash, either because they spend all their money each month (59%) or they use any spare to pay off debts (34%) but for almost a fifth (19%), the reason is because ‘they haven’t got round to it’ while 5% say they ‘don’t see the point’.
Younger people are less likely to save than older people with 40% of 18-24s admitting to having no savings at all compared to just 12% of 55-70s.
Ian Cooper, head of savings at SunLife said: “While putting pennies into a jar can be a good way of stopping yourself from spending loose change, jars and tins were never intended as secure homes for hard earned cash.
“Not only is it very tempting to raid rather than leave for a rainy day, but it isn‘t earning a penny in interest and doesn’t stand a chance against inflation.
Ian says while a good rule of thumb is to pay off debt before saving, there is no harm in having both as long as you are keeping up to date with mortgage and credit card payments.
“You generally can’t earn as much on savings as you will be paying on debt, so it is a good idea to pay off debts first and therefore encouraging to see that more than a third of those that don’t have any savings are at least using their spare cash to pay off debts.
“However, you don’t want to be in a situation where you have no savings at all to fall back on so it is a good idea to do both if you can.”
Ian concludes: “Saving doesn’t have to be a huge commitment; just think about putting a little something aside each month because even a small amount of money saved or invested regularly can build into a sizeable sum over the years.”
* Savings are defined as £100 or more