5YRs of Savings Data Shows British Financial Resilience Down
Piggy bank with stethoscope isolated on light blue background with copy space. Health care financial checkup or saving for medical insurance costs concept.
Number of people unable to save has doubled since 2019, raising concerns about financial stability amid soaring living costs – but those who can are saving more.
· The cost-of-living crisis, coupled with economic challenges in recent years, has instilled a sense of pessimism about retirement savings among people of all age ranges.
· Young adults aged 18-34 are showing remarkable resilience in saving efforts, with a significant 250% increase in average monthly savings over the past five years. However, mounting pressures, including lending money to family and friends struggling with basic expenses, are preventing them from establishing a strong financial foundation.
· Despite growing financial consciousness among younger individuals, access to professional financial advice remains limited to wealthier individuals.
· Yorkshire Building is calling for a Government review for the personal savings allowance which has not been reviewed in almost 10 years – which penalises people who are trying to save.
· Today, Yorkshire Building Society rolls out successful pilot of partnership with Citizens Advice allowing anyone (regardless of bank) to receive free and impartial guidance in branch.
Post-pandemic, more households are saving at higher rates, but the number of people unable to save has doubled since 2019 but debt has risen, especially among younger age groups. Startling statistics from Yorkshire Building Society reveal the urgent need for support among Britons facing challenges in saving money amid soaring living costs.
The average monthly saving amount has increased by 58% compared to pre-pandemic levels in 2019, indicating that many people have adopted a more habitual approach to saving. However, there is a worrying trend as well, as the number of people unable to save money on a monthly basis has doubled since 2019.
The economic challenges of the past five years, including the global pandemic, rising inflation, and the aftermath of the 2022 mini-budget, have led to significant shifts in financial behaviors among UK households. Debt has risen notably during the cost-of-living crisis, especially among the 18-34 and 35-54 age groups. In contrast, the 55+ demographic has had to support their families with rising mortgage costs and deposits, impacting their savings. Younger people seem to be more financially conscious and are saving more while exploring various account types and products. However, they still face challenges in accessing professional financial advice tailored to their specific situations.
There is a growing sense of pessimism among respondents of all age ranges about having enough savings for retirement following the cost-of-living crisis. Many feel uncertain about government messaging on savings, with some not knowing about the available options or believing that those options do not apply to them.
While younger individuals are becoming more financially conscious, access to professional financial advice remains limited to wealthy people.
Impact on Young People
The figures depict a generation weathering the cost-of-living storm, with young adults aged 18-34 showing resilience in their savings endeavors. Despite mounting pressures, the average 18-34-year-old has significantly increased their monthly savings by 250% in the last five years, going from £127 to £321.
However, the research also reveals an alarming reality – nearly two in five (38%) young adults have lent money to friends or family members struggling with basic living expenses. This burden, combined with the pressure to maintain spending habits, hinders young adults from establishing a strong financial foundation.
Confusion About Savings
As Britons navigate a complex financial landscape, the statistics expose widespread confusion about savings accounts and financial products. Over a third of Brits (33%) express uncertainty about whom to trust when seeking financial advice, leaving them vulnerable to making ill-informed decisions about their savings.
Over half of UK adults believe that the government should be doing more to support saving efforts and promoting innovation in savings initiatives. 34% of UK adults don’t know who to trust regarding their finances, and 25% don’t know who to ask for financial advice.
Moreover, only three in five (59%) of the survey respondents could correctly identify what the acronym “ISA” stands for within the context of financial savings products and services. This lack of awareness puts savers at risk of falling into a tax trap, particularly in an environment of rising interest rates.
42% felt they could not afford financial advice – and the same number feel they don’t have enough to warrant guidance.
As a prime example of this in action, two-fifths (39%) feel that the current ISA scheme only benefits those with high savings balances. On top of this, 42% were unaware of the Personal Savings Allowance.
These are just two financial items – but what else are people missing out on?
Extending Support to Those in Need
In response to the mounting need for financial guidance and assistance for all, Yorkshire Building Society and Citizens Advice have expanded their partnership to 42 towns and cities across the UK. In short, anyone seeking support can go into branches and speak to Citizens Advice on-site.
They do not need to be customers of Yorkshire Building Society to gain support.
By making Citizens Advice advisers available in selected high street branches, the partnership aims to provide free, impartial, and confidential appointments to help individuals overcome financial struggles and establish sound savings practices.
Since its pilot, the partnership has already supported over 2300 people, with 48% seeking help with benefits, tax credits, and universal credit. These appointments have
had a profound impact, unlocking over £1 million of additional income, averaging £5,700 per person. The numbers further illustrate the efficacy of the service, as the scheme assisted 1771 people in 2022, showing the increasing need for such support.
Empowering a Resilient Financial Future
As the statistics shed light on the financial challenges faced by individuals across the country, the partnership between Citizens Advice and Yorkshire Building Society stands as a beacon of hope, offering crucial support to those in need.
As the UK grapples with economic uncertainties, the partnership between Citizens Advice and Yorkshire Building Society emerges as a lifeline, offering crucial support to individuals facing financial struggles. The data underscores the importance of comprehensive financial education and assistance to build a resilient and informed society.
