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Which? calls for national savings strategy

Which? is calling on the Government, employers and the financial services industry to develop a national strategy to boost savings levels.

In a new report, the consumer group says just 41 per cent of people have savings equal to 3 months essential expenditure – the figure recommended by Government.

It also found 24 per cent of people have no savings at all, while just 14 per cent of people are “habitual savers”.

Habitual savers are people who put a regular amount away each month and keep their savings separately.

Those without the three month buffer recommended by Government are more likely to have defaulted on payments or take out payday loans, the report says.

Which? executive director Richard Lloyd says: “With half the population unhappy with their level of savings, and a financial buffer so crucial to the resilience of households and the wider economy, we’re calling on the Government to help get the UK saving.

”We’ve looked at the most successful savers and identified behaviours that the industry and Government should be encouraging to help those who can afford to save, save more.”

The report suggests the strategy should target two main groups. The first is the 23 per cent who struggle to save regularly, but would do so if they could afford to. The second is the 5 per cent who can afford to save something, but do not.

According to Which?, while 84 per cent of this second group say they cannot afford to save, just over three quarters said they prefer to spend money on things they want now, while another 23 per cent said they do not think saving is worthwhile.

However, despite interest rates being held at 0.5 per cent for 65 months, this was not cited by anyone surveyed for the report as a barrier to saving. 

Scottish Widows savings expert David Lascelles says: “This new report from Which? highlights once again the widening gap in fortunes between savers and non-savers, and reinforces the need to work together to encourage people to adjust their priorities and protect themselves for the future.

“It is vital that we tackle this culture of short-termism and make people aware of the benefits of putting aside even just a small amount every month.  Having a plan for the future can make the present feel less stressful when people know they have a buffer in place for any unexpected events that may come their way.”

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