Many of us are feeling serious financial headwinds due to the cost-of-living crisis and the current inflation and tightening monetary policy has seen many money habits change. Trends in saving and spending have been significantly impacted as reported by Leeds Building Society who surveyed 2,000 UK adults.
Only a third (34%) of those surveyed said that their saving habits had not been impacted by the current cost-of-living crisis, while a shocking 66% admitted that rising costs have affected how much they have been able to put away each month.
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Are people still saving?
The study found that while 6 in 10 Brits are putting away some money despite the crisis, 24% are saving up to 50% less than they had been. Even more worrisome is that nearly a fifth of those surveyed stated they are no longer able to save at all despite wanting to put some money away for a rainy day.
Young people aged between 18 to 30 are more likely to feel empowered to save but are the most financially vulnerable age group. They are having to dip into their savings more frequently and have reported having to use them to cover living costs.
People are saving differently across the country, with North Ireland boasting the largest percentage of residents with increasing savings in 2023. In contrast, the Isle of Wight has the highest percentage of residents whose ability to save has been 100% affected by rising costs.
While no corner of the country has been sheltered from the crisis, some places have been hit harder than others. A study by the Centre for Cities found that there is a clear North-South divide within England, with inflation being significantly higher in Northern cities such as Burnley, Blackburn, and Blackpool. Higher-income levels in the South of England are also a driving factor behind this.
Differences in income were also found to be a contributing factor to people’s saving habits but not in the way you would think. Interestingly, those earning £60k – £69k per annum have seen the biggest impact on their saving levels, while those with an income between £30,000 and £39,999 were most likely to be unaffected.
Even more optimistic is that 4 in 10 Brits who earn under £10,000 annually were still able to set themselves a saving goal, despite being at the lower end of the pay scale.