North-South savings divide doesn't exist, says NS&I

4 December 2009

Savings behaviour of more than 50,000 people over the last five years revealed

NS&I today releases the results of five years' worth of its Savings Survey data, which reveals that perceptions of a North-South savings divide no longer seem to be valid. Despite variations in house prices and take-home income, there are now limited North-South differences when it comes to savings behaviour.

More than 50,000 people have been interviewed for the survey since it began in autumn 2004, providing a comprehensive picture of Great Britain's savings habits over this period and - in particular - where the regional savings hotspots are. The data shows that while London and Scotland have consistently recorded high levels of savings, the South West and North East have struggled.

As might be expected, Greater London has registered the highest savings levels over the last five years. In 2009, the average amount of money saved as a percentage of monthly income - the individual savings ratio* - was 6.65 per cent, higher than any other area of Britain. This compares with a national average of 6.06 per cent over the last 12 months. More than half of the London population (51 per cent) also said they set money aside on a regular basis, more than anywhere else in Britain and higher than the national average of 47 per cent.

Scotland has also consistently set aside significant amounts of money over the past five years. Since the Savings Survey began in 2005, the nation has recorded a high number of people setting money aside on a monthly basis (2009: 49 per cent). 2008 saw the number of people regularly saving money in Scotland peak at 54 per cent, the highest annual figure recorded across Great Britain.

Like London, the South East has enjoyed a strong savings record across the five years that the Savings Survey has been running. With the exception of London, this region has recorded the highest figures in the country in 2009 for the amount of money regular savers set aside each month (£196.56 compared to a national average of £188.20) and the ideal amount of money people would like to save (£207.05 compared to a national average of £196.91).

Tim Mack, NS&I's savings spokesperson, comments: "The results of five years' worth of our Savings Survey data, offers a detailed picture of savings behaviour across the country. Many regions have established strong savings behaviour over the past five years and the New Year is the perfect time to evaluate the amount of money you are setting aside each month and consider setting savings goals."

Examining other regions in Britain highlights that East Anglia, the West Midlands, the South West and the North East have struggled to match savings levels of other regions.

People in the South West have some of the lowest savings levels across Britain. The average amount saved as a percentage of income was just 5.81 per cent. The number of people who said they saved money regularly was the second lowest in Great Britain at 46 per cent. The lowest region for this savings level in 2009 was the North West with 44 per cent compared to a national average of 47 per cent.

People in Yorkshire and Humberside have consistently set themselves high savings targets but have been unable to turn this into reality. During 2008 and 2009, the region saw the highest ideal savings as a percentage of income (2008, 15.18 per cent; 2009, 15.13 per cent; national average in 2009, 14.22 per cent), but savers were actually only managing to translate these ideals into a smaller amount of their take-home income (6.52 per cent). However, this is still well above the national average of 6.06 per cent.

When the Savings Survey began, the region with the lowest figure for the amount saved per head was found in the North East (£58.84) and this has again been the case again in 2009 (£73.95 compared to a national average of £83.87). This region has consistently been one of the lowest regions for saving money in Great Britain.

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