40% of adults are saving to have money to fall back on

When it comes to savings goals, 40% of adults are saving to have money to fall back on. Of that 40%, more women than men are saving to have a financial buffer in place to better prepared if the unexpected were to happen.

These findings come from our recent research [1] which looked at how savings habits have changed with the impact of Covid-19 and how we now perceive the value of financial security. Surveying over 2,000 employees, we found that 40% of UK individuals are now putting money aside so they have something to fall back on should unexpected circumstances occur.

We looked at what individuals are prioritising their savings for. After saving to cover yourself should the worst happen, what’s encouraging is that the second most popular reason for putting money aside is for retirement, with one in four individuals (25.99%) recognising the importance of saving for later years. Of course, having enough money to support yourself (and potentially family) through difficult and unexpected circumstances goes a long way to giving you peace of mind and therefore less worry and anxiety, but it shouldn’t be at the expense of longer-term savings. If we’re only saving what we think is enough for a rainy day (be it the car breaking down, the boiler going, redundancy and any number of other situations that mean dipping into your reserves) if it comes (and really we mean when it comes) what other savings do we have for the longer term?

Our research found that while 30.43% of men surveyed are putting money aside for retirement, only 21.79% of women are doing the same. We need to make sure all savings goals are in sight when it comes to putting money away, otherwise, we’ll be left with gaps at various stages of life. 

Other findings from the research included that one in five (19.60%) UK adults are saving for a better work/life balance with many enjoying the flexibility of working from home this year and not having long commute times. With more time at home, 16.26% of individuals are putting money aside to make home improvements and 15.08% of those surveyed are saving on behalf of their children to be able to help them ensure a brighter future. 17.03% are saving for a deposit for their first home – however, while 21.52% of women are putting money aside for this reason, just half the number of men (12.29%) are doing the same.

Recent statistics released by the ONS [2], found that the level of disposable income being saved has risen from 9.6% to 29.01% this year. With lockdown restricting us somewhat, many have been able to save money that would have ordinarily been spent on holidays, going out socialising and perhaps a spot of shopping. Not to mention the millions of people now working from home who are saving hundreds, if not thousands of pounds, on commuting costs. Those lucky enough to find themselves with a bit more spare cash than usual are recognising the importance of putting money aside now to pay towards those short, mid and more long term financial priorities while they can.

Through interactive technology and an easy to access app, Cushon aims to help the UK get more comfortable with saving and investing, and ultimately get a more comfortable life. Covid-19 has made us all more aware of the need to have a financial buffer in place to protect us in the event of the unexpected. Despite financial injections from the government, worries about job losses and further setbacks mean that many of us are now worried about how to cope financially should the worst happen and we want to be better prepared.

Sources

[1] Cushon research on financial security and its importance – September 2020

[2] ONS Coronavirus and its impact on the UK Institutional Sector accounts – July 2020