Investing and repaying debt take priority for people who come across extra income, says Watson Wyatt.
The consultants conducted research asking 2,500 people what they would do with an extra £200 a month. Participants were allowed two responses.
Findings showed that 46 per cent would invest at least some of it, 43 per cent would use some of it to repay debt while 8 per cent said they would use some of it to invest in a pension scheme.
Only 6 per cent said they would spend it immediately while 28 per cent would put some of it aside to pay for a holiday or other large expenditure.
Watson Wyatt senior consultant Gary Smith says: “It is pleasing to see we are not a nation of spendthrifts. At least in theory, if not always so much in practice, many people’s priority is on generally improving their financial stability, whether that is through repaying debt or building up their long-term savings.”
“People clearly have a wide range of financial priorities, with the balance of debt repayment, spending, short-term saving and long-term investing changing depending on their circumstances. This is why financial communication and education – from financial services companies, employers and others – is so important.
“A one-size-fits-all approach is never going to work. To make the right financial decisions people need help and encouragement to recognise what their financial priorities are and to understand what options are available to them.”