Saving Face: 33% of those in debt blame savings habits
- Over 1 in 4 (27%) struggle to save up to 10% of their monthly income.
- A third of people in debt believe their savings habits are to blame.
- More than 1 in 10 (13%) dip into their savings every month to cover bills.
Swirling expectations to save have left many people developing unstable habits, with over 1 in 4 (27%) struggling to save 10%, while almost half (46%) feel they should be saving double, if not triple that each month. The new study by online savings provider Ford Money, also found that not only are people struggling to save each month, but they are falling into unstable habits leaving them unable to safeguard the savings they do manage to squirrel away as more than 1 in 10 admit to dipping into their savings every month, most commonly to cover bills (38%).
The pressure to save is clearly mounting, as the all-or-nothing mindset takes hold. Over a third (34%) believe that saving as much as possible, even up to 50%, each month is the best strategy. However, evidence would suggest that this approach is raising some financial red flags. According to the study, one-third (33%) admit to being in debt due to unstable savings habits.
These financial woes aren’t all that surprising given the ongoing cost of living crisis, however, there are other factors at play, primarily the lack of understanding of how to make the most of your savings. According to the research, over 70% of people have never considered switching bank accounts in search of a better interest rate for their savings, despite almost 1 in 4 (37%) agreeing that it is in fact better to move money around.
However, many well-intentioned savers could be missing out on opportunities that could make their money work harder. Whether it be switching your bank or upgrading your account with your current provider, small changes in your rates could make a world of difference. This failure to maximise savings is particularly noteworthy considering the current high base interest rate of 5%1. With nearly a quarter (23%) of Brits having no savings at all, many are missing out on the opportunity to benefit from the current favourable economic climate.
Will Davies, Chief Deposits Officer at Ford Money, said: “To thrive in today’s financial landscape, savers need to equip themselves with knowledge and maintain a curious mindset when it comes to exploring different banking options. By staying updated on the latest interest rates, they can confidently make informed decisions and optimise their savings strategy in this high-interest environment. Switching is an option that can be beneficial, however, we urge people to take time to do their research before they switch; best rates don’t always apply to new customers and sometimes hail heavy caveats to access. Ford Money is proud to offer our Best Rate Guarantee because it means we can do the leg work for you, whether you are a new or existing customer you will receive the best rates.”
Ford Money commissioned research firm, Censuswide, to conduct the research. The study was conducted from June 30th to July 5th, 2023, and involved a comprehensive poll of a diverse sample size comprising 2015 individuals aged 16 and above.