Savers reap rewards by setting specific goals

24 October 2011

NS&I research shows Britons with a savings goal save 44% more every month than those without.

Britons who set themselves regular savings goals put aside over £40 extra per month compared with those who don't, adding up to an additional £500 saved every year

Nearly a fifth (19%) of those with a savings goal set aside over £250 each month, or over £3,000 each year

However, surprisingly, less than a third (29%) of the population say they have a savings goal

According to new data released today from NS&I's Savings Survey, British savers who set themselves goals are likely to save 44% (£42.50) more each month than those without such a savings objective. That adds up to an additional £500 over a full year.

On average, Britons with regular savings goals are managing to set aside almost £140 (£139.79) each month, compared to £97.28 for those without a goal. Nearly a fifth (19%) of people with a savings goal set aside more than £250 each month, compared to less than one in ten (9%) of those without savings goals.

However, despite the clear boost to savings from having an objective, less than a third (29%) say they set themselves a goal and save for something specific.

NS&I savings spokesperson, John Prout said: “Our research shows that savers who set specific targets stand to reap the rewards. For instance an extra £40 a month saved could cover the cost of insuring your car for a year, or perhaps pay for that very special weekend break. Setting a specific objective is a good way to stay motivated, even if it's only a small amount being set aside each month.”

For those who set themselves a goal, the biggest motivation is to buy a property, with over two fifths (41%) saving for this reason. This has increased from just over a third (35%) last quarter. Other priorities include:

Saving for a holiday or special occasion (37%)

Saving in case of an emergency (23%)

Saving for retirement (20%)

Saving for a car (18%)

Saving for children's future (14%)

Across the population, savings levels have dropped for the second quarter in a row, despite increases in the average monthly income. As a result, Britons are now setting aside just 7.49% of their income every month, down from 8.31% in spring 2011. Furthermore, a quarter (25%) of Britons are now saving less than £50 per month.

NS&I savings spokesperson, John Prout said: “We would encourage people to think carefully about their daily expenditure, and use a goal to motivate them to help boost their savings pot. Keeping a weekly diary of spending can be a good way to keep track of outgoings and there are lots of great online tools and free apps available to help with this. Setting small achievable objectives, such as bringing coffee to work in a flask and making a tasty packed lunch instead of buying lunch, are easy ways to make considerable savings and increase long-term financial security.”

Additional results from NS&I's Savings Survey reveal that for the second quarter in a row, 13% of Britons admit to having no savings at all, while a fifth (20%) have less than £1,000 in savings. With the average monthly income at £1,265.07, many Britons therefore have less than a month's income set aside in case of an emergency.

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