Savings over the summer months are set to fall, despite an increase in overall savings levels over the last year, with women saving more than men for the first time, reveals research from NS&I.
In its latest Quarterly Savings Survey, NS&I reveal the number of regular savers increased from 48% to 55% over the summer last year, and has since remained constant, despite 45% of the population making very little effort to secure their financial future.
It also shows over the last three months a record number of women, 54%, are saving regularly, and they are putting away a larger slice of their monthly income into savings compared to men.
According to the survey women are putting away around 6.84% of their income each month, which is 1% higher than last year and one of the highest level recorded. It is also the fist time since the quarterly survey began in 2004 where women are saving more than men, who put away just 6.37% a month.
But while women may be saving more each month, their total savings is actually less than men because of the gap in earnings, as the NS&I study reveals the average monthly earnings fro men is £1,508.10 compared to just £1,047.50 for women.
Over the last year men have also received pay increases of £138.40, almost twice that of women who were awarded just £55.20, while 35% of women state they are limited to how much they can save because of income constraints, a figure 10% higher than men.
However the research reveals overall people are committed to saving a larger proportion of their monthly income, rising from 5.82% in Spring last year, to 6.49%.
But NS&I warn while savings have increased over the last year and the gap between actual savings and expected savings is decreasing, it believes this is because people are lowering their savings aspirations rather than increasing the amounts they put away.
The survey says a lack of financial planning may be compounded by an overall lack of financial awareness, revealing 26% of the population admitted they do not know how much they are saving, which rises to 40% for men over the age of 65, and 42% for women over 55.
However NS&I point out while 43% of the population are worried about their finances and particularly long-term savings for retirement, 58% have done nothing to combat the problem.
Dax Harkins, senior savings strategist at NS&I, says there is clearly still a big need fro more accessible financial education to help people get over their fears and sort their finances out.
He adds: “there are some simple things which you can do to get a better grip on your finances. Whether it’s just talking to a friend or relative, getting advice from an IFA or starting to increase your savings, it is important those Brits who are anxious resist the temptation to bury their head in the sand.”
Looking ahead, the NS&I report shows the savings outlook over the next three months is not so positive with a predicted drop in savings of 6%, although trend information suggests saving levels will pick up in the Autumn.
But overall the outlook for the year ahead seems to be positive with a prediction it will rise 13%, as the population seem to strongly believe they will readdress their savings profile, although NS&I suggests few people will take immediate action, leading to the negative outlook for the next three months.
Harkins says: “It’s encouraging to see savings levels have increased overall, however for the second year running we have seen savings levels fall in the spring months, from 6.9% in the winter, to 6.49%, although this may be due to the traditional spring house-hunting season firmly under way.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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