Adults are spending more than half of any money received as windfalls such as inheritances and bonuses, with just 8% going towards mortgage or debt repayments, claims Birmingham Midshires.
The latest research, from the building society’s Saving Britain campaign, shows the average Briton received a monetary windfall of £5,944 in the last year, but just 40% was saved or invested, with 7% going towards the mortgage or paying off debts.
In the survey of 2,000 adults, only 48% of bonuses, inheritance and other cashflows were put towards people’s futures, with 15% spent on holidays, 6% on cars and 31% on other luxuries.
Birmingham Midshires also claims the type of windfall determines the way the money is spent, with those receiving redundancy pay putting 15% towards mortgage repayments, almost double the average.
Meanwhile, of those who received bonuses, over a fifth spent the money on a holiday, while 48% of cash gifts were saved or invested, although those who receive cash are likely to spend twice as much on a car.
Jason Robinson, director of savings operations for Birmingham Midshires, says: ”It’s easy to be tempted to splurge when we get an unexpected windfall, but it is important to find a healthy balance between spending on luxuries and treats, and the less exciting ways to use money such as paying off debts and saving.”
He adds by using bonuses, inheritance and redundancy money to save or invest for the future will eventually provide Brits with an even greater windfall when they need it most.
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Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October