42% of people don’t think they are saving enough to be financially secure

We’ve been thinking a lot about financial resilience lately. Being financially comfortable, and how this means different things to different people. We all have basic hygiene requirements when it comes to money – being able to put a roof over our heads, food on the table, clothes on our backs. But what about having a pot of money to deal with unexpected expenditures – the boiler breaking, the car needing repairs and all those other things that life throws at us sometimes.

Given how the year 2020 has panned out, it’s been encouraging to see that for some, saving and putting money aside to have something to fall back on has been easier than previous years – with less socialising, dinners out and commuting, many have found themselves with more disposable income. But despite savings being at an all-time high [1] – our recent research found that 42% of people say they are still not saving enough to consider themselves financially secure [2].

Of those, 31% said they do not have enough disposable income or feel they are in a position to build a level of financial resilience because of other priorities. This was particularly the case amongst those aged between 16-34 years. 17.78% of respondents said they didn’t know how to become financially secure - this was found to be much higher amongst women with 23.97% stating this as an issue compared to 10.58% of men.

Previous Cushon research carried out during the first lockdown found that 78% of UK adults across all age groups agree [3] that the Covid-19 pandemic, and the unpredictability of the year, has made them realise that having accessible savings is very important. The latest research found that 40% of those saving money right now are putting cash aside so they have something to fall back on should the worst happen. 16% of UK adults are concerned about how to save consistently and just 7% had no financial concerns at all.

Being able to save to have financial security is clearly a big priority for so many, but what’s clear is that most of us don’t feel like we know enough or have enough to do it properly. Where do we go to find out what we should be saving and how? What tools do we need in order to make sure that we’re saving enough and in the right place? Savings should be accessible to all – there’s no reason why we can’t all put something aside each month.

Does your employer have a savings scheme you can pay into? Many people find these schemes convenient as they can save direct from pay – so the money never actually hits your bank account and is safely squirrelled away! And by investing rather than saving in cash, there is an opportunity to make more of your money, especially as the barriers to investing are being lowered with easier digital platforms used by many and lower starting amounts e.g. you can start saving from £10 a month. By taking advantage of these workplace schemes the way you save becomes a habit. Therefore, you start building financial resilience – not just for now, but for the long-term future too.

Sources

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

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

[3] Cushon‘s Financial Resilience research – May 2020