Having a healthy savings account is more critical than ever for households managing the cost of living crisis. Many Brits are also still planning to save for long-term goals, such as buying a property or saving for retirement. But how much do British people have in savings in 2022?
The UK is experiencing a cost of living crisis and with inflation at a 40-year high, everything is becoming more expensive.
With the increase in living costs, how are Brits saving money each month? And how much do Brits have in savings at the end of 2022?
This report reveals the attitudes of 2,000 Brits when it comes to their finances and savings in 2022. If your goal is to start saving in 2023, make sure to compare savings accounts to get the interest rates on your money.
1 in 10 respondents reported they do not have any savings at all.
Savings generally increased with age. 41% of over 65’s reported savings of over £20,000 compared to 12% of 25 to 34-year-olds. However, 45-54 year-olds were the most likely age group to have no savings at all (15%).
Around a third of respondents (31%) reported saving less than £100 a month.
In general, higher monthly savings were most associated with younger age brackets.
Over 30% of respondents reported beginning saving before the age of 18.
Over a quarter of Brits (26%) don’t have an emergency fund.
Just over 1 in 6 (17%) of Brits dip into their savings every month.
The most popular saving account in Britain is easy-access savings with 41% of respondents owning one.
Almost two-thirds (65%) of respondents reported they are saving towards retirement, with those aged between 25-34 the most likely to report they are saving for retirement (70%).
When investigating current savings (not including pensions), 11% of respondents, or 1 in 10, reported that they do not have any savings at all.
The most common band of savings among respondents was savings of over £20,000. This was slightly more common than savings of between £5,001 to £10,000 (17% of respondents). Overall, 70% of respondents had over £1,000 in savings, 44% had over £5,000, and 18% had over £20,000.
Savings generally increased with age. 18-24 year-olds were most likely to have savings of less than £1,000 (32%), with almost a third of respondents in this age bracket reporting their savings as under £1,000. 25-34 and 35-44 years olds were most likely to have saved between £5,001 to £10,000 (28% and 19%), and those over the age of 45 were most likely to have savings of over £20,000, with 41% of those over 65 having this level of savings.
Despite this, 45-54 year-olds were the most likely age group to have no savings at all (15%), followed by 35-44 year-olds (13%) and 55-65 year-olds (12%). Older generations may be more likely to currently have no savings due to large investments such as a mortgage, that younger generations are still saving for.
Around a third (31%) of respondents reported monthly savings of less than £100 compared to a quarter (25%) who reported monthly savings of between £100 and £200. This means over half of respondents (55%) save less than £200 per month. In comparison, just 8% reported savings of over £500.
Saving between £100 and £200 per month was the most likely level of savings across those aged 18-44. Those over 44 typically save less than £100 per month, with almost half of 55-64 year-olds (48%) reporting saving less than £100 per month.
In general, higher monthly savings were most associated with younger age brackets. Younger people are less likely to have children, which often means they can save more than those with children. Younger people are generally more likely to still live at home or rent homes with friends, further reducing their outgoings and allowing them to save more.
Many of us put money away each month to save for future expenses. The ONS estimates that, on average, Brits put away 8% of their earnings as of Q2 2022. Accordingly, 51% of respondents reported saving between 1 and 10% of their monthly income. A lower 31% reported monthly savings of more than 10% of income, with the remaining 18% being unsure.
Just over a quarter of respondents (26%) reported saving between 1-5% of their monthly income. Another quarter of respondents (25%) reported saving between 6-10% of their salary.
As many of us know, the earlier you save the more you have in the long term. But at what age does the average Brit start saving? Results show a quarter of respondents reported they began saving between the ages of 20-24 (25%). 16% reported saving between the ages of 16 and 18 and 16% reported saving before the age of 16. Overall, 30% of respondents reported saving before the age of 18 and 57% began saving before they turned 25.
Those currently aged between 18 and 24 were significantly more likely to report starting saving between 18-24 (42%) than all other age groups. This may be explained by the huge uptick in saving reported by the ONS during the COVID pandemic, which saw average savings jump to a high of 27% of income in Q2 of 2020, a level of saving unseen since records began in 1963.
Over two-thirds of respondents reported having an emergency fund (69%). These figures also mean that over a quarter of respondents (26%) do not currently have an emergency fund. An emergency fund is important as it means you'll be safer when experiencing financial crises such as losing your job or paying for emergency repairs. It’s also advantageous in times of recession when inflation is high and saving is harder.
45-54 year-olds were the least likely to have an emergency fund (65%), followed by 18-24 year-olds (54%). Those over 65 were the most likely (78%) to have an emergency fund. Younger generations also reported much less total savings than older generations, meaning they would have less money to spare to contribute to an emergency fund.
Many people will suggest that a good rule of thumb when it comes to emergency funds is to save up at least three to six months' worth of expenses. This includes rent, living costs, and any other necessary outgoings for six months. Of those who reported they had an emergency fund, a majority (26%) reported they had over £5,000. The next most common fund (16%) was between £4,001 and £5,000 followed by funds between £3,001 and £4,000 (15%).
It appears that as people get older they are more likely to have emergency funds. 18-24 year-olds were the most likely to have emergency funds less than £500 (7%). This compares to 91% of those over 65 who had emergency funds over £500.
The size of emergency funds also grew with age. Those over the age of 45 were much more likely (over 40% of respondents in each age group) to have an emergency fund of more than £5,000 than those below 45 (less than 20% in each age group).
Saving is hard on its own, but actively dipping into your savings over time and reducing your total pot can make it harder. In addition, some savings accounts will penalise you if you make too many withdrawals. These penalties often mean less interest is earned on your savings. Just under a quarter (23%) of respondents estimated that they dip into their savings at least once every 1-3 months.
Younger age groups were generally dipped into savings more frequently than older age groups. 18-24 year-olds and 25-34 year-olds were most likely to dip into savings every 1-3 months. This compares to 45-54 year-olds, 55-64 year-olds, and 65+ year-olds who were all most likely to dip into their savings less than once a year.
25-24 year-olds were the most likely to dip into savings every month (19%) and the least likely to have never dipped into savings (4%). Almost a third (32%) of 25-24 year-olds admitted to dipping into saving every 1-3 months.
Over 65s were the most likely to have never dipped into their savings (17%) and only 9% of over 65s have dipped into savings every 1-3 months.
The most popular savings account with respondents was easy-access savers, with 41% owning this type of savings account. Easy access savings accounts allow you to pay cash in and withdraw cash from the account anytime you like, while still paying you interest on the money while it's in the account.
The next most popular type of savings account was regular savers (34%). Regular savings accounts usually earn you higher interest but require you to put money in every month, often limiting the number of withdrawals you can make. The higher interest rates commonly only last for a year and interest is paid annually.
Those aged between 18 and 24 were much more likely than other age groups to save in investment ISAs (27%) and were the least likely to save in instant access accounts (22%). They were also the most likely to save in help to buy accounts.
Finding the right kind of savings account to suit you can make all the difference. Taking the time to compare your options and work out which saver will best help you achieve your financial goals could be the difference between earning 5% and 1% on your savings at the end of the year.
Almost one-third (31%) of respondents are not saving for their retirement. Saving for your retirement is extremely important. Saving as early as possible will ensure that you have enough saved up to enjoy a comfortable standard of living when you stop working. Pensions are also a great way to save as they are one of the few areas where you can get tax relief on your money.
A large majority of 67% of respondents began saving for retirement before they hit 30. More and more people are living longer and leading more active lives during their retirement. It is extremely important that you consider where your income will come from when you retire so you can fund your retirement plans and look after yourself in your old age.
Saving for retirement can be more than just paying into your pension. In the UK, a Lifetime ISA can be a great way to save for when you retire, offering 25% top-ups on all savings up to £4,000 per year. Many people also choose to invest their savings in Investment ISAs in the hope they can grow their money over long periods of time. Compound interest really is the eighth wonder of the world.
Saving money can be difficult, but it is important. A great way to begin saving money is to set a realistic target for how much you want to save each month or by the end of the year. You can then use this number to work out how much you need to save each week or month to hit your target.
There are many to choose from and each has its own pros and cons.
Easy-access accounts let you make withdrawals whenever you need, however, they usually pay lower interest rates.
If you don't need to touch your cash regularly, a fixed-rate account will usually offer a higher rate but you won’t be able to withdraw any money for a fixed term.
Lifetime ISA’s grant you a 25% top up on all savings up to £4,000 a year, but you cannot make a withdrawal until you buy your first home or retire.
If you have used your personal savings allowance then it would be worth considering a cash ISA. Saving in a cash ISA will mean you never pay tax on the interest paid on your savings.
A children's savings account is a great way to introduce your kids to saving and teach them how to best make use of their money. Children’s savings accounts help kids learn that putting their money away in a bank protects their cash and earns them more money over the long term, which are valuable lessons at a young age.
Results were recorded using TLF Panel. This survey sample was made up of 2,000 respondents.
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As a trained journalist, Lucinda has spent the past 10 years writing and editing content for regional and national titles, including The Mirror, WalesOnline and Manchester Evening News. She is now a personal finance editor and specialises in savings, helping people to make confident financial decisions so they can save for what matters most.