Research conducted by pension advice specialist, Portafina, has revealed that Brits are successfully saving a sixth of their annual income for the future, and Glaswegians are the best at putting money away for ‘a rainy day’.
Portafina polled a sample of 2,007 UK-based working adults to determine the average sum of money we have in savings, plus how much money we have put away in the last year, where we saved it, and what we plan to do with it. The results provided an intriguing insight into how Brits are preparing for their futures.
With the average UK annual salary sitting at £27,0002 (of which £21,600 is ‘take home’), and a basic standard of living (for a single person with no children) expected to cost more than £16,000 a year, Portafina was pleasantly surprised to discover that on average, each adult was able to put more than £3,340 into savings (£2,537) and pensions (£803) in the last 12 months.
Of the £2,537 saved in a typical bank account, £600 came from a work bonus, £245 from a gambling or lottery win, £475 was gifted by family, £707 inherited, and £510 was set aside from salary.
The estimated personal contribution to a pension was £803. As expected, age played a part, with 18-24s (65 per cent) and 25-34s (48 per cent) admitting to putting less than £500 into their pension pot in the last year.
Of the total £3,340 saved per person, just under £800 was taken out again; usually for unexpected bills or a holiday.
The study also revealed that men typically save more than women, with one fifth of women (20 per cent) having up to £10,000 saved, versus a third (35 per cent) of men.
Looking onwards and upwards, £2,650 was the total figure that Brits hope to save in the next 12 months – a very similar sum to what was achieved on average in the last year (£2,357).
Jamie Smith-Thompson, Managing Director at Portafina commented: “The poll gives a very healthy view of how people are managing to save in the UK. As a financial adviser, it is heartening to see that people’s aspirations for saving in the future appear to be close to what they are setting aside at the moment.
“What remains vitally important is how that money is saved for the long-term as well as the short-term. If a bank account is where you are keeping all your savings, then you are missing out on the growth that you could enjoy elsewhere, such as an ISA. And if you are saving for your future, you are missing out on substantial tax relief. That £3,340 would instantly become at least £4,175 in a pension just through basic tax relief.”