Press Release

NS&I'S QUARTERLY SAVINGS SURVEY: WINTER 2005/06

7 March 2006

Hardcore non-savers refuse to budge but regular savers stay on track

• Almost half of Brits (45%) not saving regularly

Whilst 55% of the British population are saving regularly, a distinct hardcore group of people who find regular saving unattainable or unattractive has emerged over the last nine months, according to the latest NS&I Quarterly Savings Survey.

Almost half of the British population are not saving regularly and the number has plateaued at 45% for the past three quarters, after rising slightly from winter last year (44%).  At the same time, two in five (41%) have no savings goals, suggesting that the hardcore non-savers are not committed to saving regularly because they do not have any clear savings objectives and lack the motivation to save.

For those who did save, however, winter 2005/06 was still a relatively strong savings season.  Although Britain as a whole saved less over the winter after a record-breaking autumn quarter in 2005, the total amount saved during winter was the second highest recorded since the survey began in September 2004, at 6.90% of income saved, matching winter 2004/05.

	Winter 2004/05	Spring 2005	Summer 2005	Autumn 2005	Winter 2005/06
Number of regular savers	56%	48%	55%	55%	55%
Number of non-savers	44%	52%	45%	45%	45%
Percentage of monthly income saved	6.90%	5.82%	6.64%	7.16%	6.90%

Dax Harkins, senior savings strategist at NS&I commented: "The positive savings attitude of more than half of the British population is really encouraging, but we are concerned about the emerging group of hardcore non-savers. Despite growing interest in financial matters over the year, our research highlights a continuing trend that almost half the British population are not saving regularly.

"This is worrying and appears to correspond with the large number of people who say they do not have anything to save for. The financial services industry needs to step up its efforts on financial education and impress upon these hardcore non-savers the importance of saving regularly and cultivating healthy financial habits.  Also, it has to look at ways to make savings easier for people." 

The research also shows one in 10 Brits (12%) are more interested in living for the moment rather than cultivating good long-term savings habits. A third (31%) said insufficient income was the reason for not putting aside more money each month, while almost a quarter (22%) blamed heavy financial demands.

People who find regular savings difficult can start by deciding what they want to save for and setting clear savings goals for themselves. Saving should get easier once people can appreciate the tangible benefits of saving and take proactive step towards achieving their goals.

Savings tips

• Have clear savings goals
• Set realistic savings targets
• Start by cutting back on one luxury a month
• Set up standing order to save regularly
• Limit credit card spending
• Get support from loved ones and friends
• Seek professional advice if necessary

Popular goals among British savers include saving to purchase a property, repay a mortgage or carry out home improvements (15%). (See table in Notes to Editors)

The NS&I Winter Savings Survey, covering the months of December, January and February, is the sixth issued since the Survey was launched in December 2004, and provides a detailed examination of British consumers' savings patterns during the quarter as well as their likely savings patterns over the next three months and in the year ahead.

Key Highlights:

SAVINGS TRACKER: how have Brits been saving over the past three months?

• Percentage of income saved dropped slightly from a record-breaking 7.16% in autumn to 6.90% in winter (the same as winter 2004/05). This equates to an average £85.71 a month.
• Best savers this quarter are men (7.32% of income), 16-24 year olds (9.65%), singles (7.60%), and people from the North West region (7.73%).
• Savings target (14.46% of income) dropped from autumn (14.75%) but remains one of the highest since the survey began.

SAVINGS OUTLOOK:  How will Brits save in the future?

• Brits positive about saving: People are more upbeat, predicting a small increase (+2%) in savings over the next three months. This mirrors last winter, the only other quarter which recorded a positive savings outlook (+9%).  All other quarters registered a negative savings outlook.  The savings outlook for the year ahead is extremely optimistic at +24%.
• Increase in savings levels more likely to occur in autumn: Savers may feel most positive about saving in the spring months after spending on Christmas and New Year, but they are actually more likely to increase savings levels in autumn, going by past trends.
• Women fall further behind men: women's savings levels dropped to their second lowest on record - 6.39% of income, while men's savings increased to 7.32% of income. Women's savings hit their lowest at 5.72% in spring 2005.
• 35-44s surprise with new records: 64% are saving regularly - the highest of all age groups - and they are putting an average 6.88% of income away - the most to date.
• Older savers continue to cut savings: the number of regular savers in the 55-64 age group (52%) is still significantly down on that recorded in winter 2004/05 (61%).  The amount they saved is also on the decline and at 6.06% of income, is its second lowest level recorded. The lowest level of 5.46% was recorded in spring 2005.