What are the UK’s savings goals?
We know it can be difficult to prioritise saving a percentage of your income each month, especially when there are unexpected bills and other costs you can’t budget for in advance. But millions of Brits are saving and we have explored a bit more about the nation’s attitudes to saving and what we are saving for!
Research into the UK’s saving habits found that a shocking 16% of us don’t see the point of using savings accounts, but nearly half (46%) prefer to have more than one bank account. It was interesting to discover that those of us saving are doing so to help achieve long term goals and future plans.
Top things people save for:
- A holiday (28%)
- An emergency fund of savings just in case they need it (19%)
- Retirement (16%)
- Moving house or buying a house (14%)
- A new car (11%)
Three of the top five savings goals include shorter term purchases like a holiday, new car or just in case so it’s no surprise that half of Brits (50%) have an instant access savings account which allows you to dip in and use your savings whenever you want. The second most popular type of savings or investment product is a cash ISA (33%) and in third place is premium bond investments (19%). With many high interest savings accounts your money is locked in for a fixed period of time but you’ll be rewarded with higher rates rather than instant access.
Almost one in seven of us are saving for retirement or for a house deposit - if these are your savings goals and you're aged 18-39, a Lifetime ISA will give the highest returns with a 25% bonus on your savings each year - and you can open the account in branch or online. For every £4 you invest, you will receive a £1 bonus up to a maximum bonus of £1,000 a year for those who save the maximum of £4,000 annually. A Lifetime ISA can supplement standard pension savings and is not the only option for later life saving.
The extra £1,000 a year is paid by the Government (if you are under 50 years old) and you also earn interest on top of your balance. You can open the account with just £10 and can invest up to £4,000 a year where you will earn a 25% bonus on your savings. The savings can be used for boosting retirement income or buying a first home. In fact, if you use your Lifetime ISA to invest in your first home after 12 months.
If you withdraw from your Lifetime ISA before the age of 60 or for something other than the purchase of a first home, you will incur a 25% withdrawal fee which means you could get back less than you paid in. Apply for our Lifetime ISA here. We no longer accept transfers in. To find out more click here.
We know that savings can contribute to our financial health and how we all think about money. In terms of financial health, over two thirds of people (68%) said they’ve had no change in their financial situation since last year, but nearly a fifth (18%) feel financially worse off now compared to last year. Just 10% of people feel financially better now than they did in 2018. Our analysis also revealed that a third of people (33%) admit to feeling confused by financial matters, but this needn’t be the case. Over in our Saver's Nation hub, we share lots of information you'd need on a wide range of savings tips, products available with The Nottingham and more - no matter what your goals are.
Remember, your home may be repossessed if you do not keep up repayments on your mortgage.
The maximum you can save each tax year is £4,000. The Government will pay a 25% bonus of up to £1,000 each tax year. You can withdraw money from a Lifetime ISA to buy your first home, or at age 60. Any other withdrawals made from your Lifetime ISA will incur a 25% Government withdrawal charge which means you could get back less than you paid in. Full terms and conditions are available at thenottingham.com.
The Nottingham's analysis of responses of 173,666 UK adults from YouGov Profiles, showing statements agreed with about Finance, Household & Economics and Consumer & Lifestyle. GB Profiles survey completed on 17/02/2019.
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