Many Brits will have something to smile about when they check their bank balances – the amount of money in there could well have risen.
We hear a lot about the tough times facing officials trying to balance public finances in the United Kingdom and its people are a fair way from a coast along “Easy Street”. But unemployment did fall sharply in the three months leading up to the end of October and new figures in the second annual ING International Survey on Savings, which our team coordinates, suggest Brits are digging in and managing to put aside extra cash when they can.
Top of the table
Brits ranked top – jointly with Turkey – in the 14 country ING survey to have the highest share of respondents saying that they added to their savings in the last year. In these two countries, 47% in each said they were adding to savings; well above the 34% for the average European, and more than three times than that for Italy.
These results echo earlier findings from ING Direct UK’s Consumer Savings Monitor – a separate survey that focuses only on the UK – that found in the third quarter of 2012, savers had boosted their savings by about £200 from the same time a year earlier.
Of course, saving at all cost is not a goal many people have. And nor should it be. Spending on things we enjoy is part of the mix of life but it can also be very rewarding to set a goal and reach it; making sure a financial buffer is available to use in case of emergency.
Around the world in savings
The ING International survey exposes some fascinating differences regarding attitudes to money in different parts of Europe. Among them are:
Brits are the most likely to save for a holiday.
- The Dutch are the most comfortable with the amount they have saved, topping the comfort savings league in 2013 that ranks countries based on the proportion of the population who say they are “comfortable” or “very comfortable” with the amount of money they have in savings. The Turkish made the largest upward movement over the past year in the league table, up six places to fifth.
- Slovaks are the most likely to be able to pay for three months of regular spending if their income fell a lot – with 66% saying they could cope. This is much higher than the average European at 49%.
- Brits are the most likely to be saving for a vacation – with highest percentage of all 14 countries surveyed who say a holiday is their top savings goal.
Develop a helpful habit
A slight tarnishing of the golden glow of the UK’s sunny results is the fact that Brits are much more likely to be saving from “time-to-time” rather than regularly. This ad hoc style of saving doesn’t make the most of the chance for savings to become a positive habit. Researchers from Tilburg University in the Netherlands – and published on SSRN – are among those who have found that people without a systematic approach “save substantially less”.
Putting money into savings at the start of the pay cycle is known as “paying yourself first” and prioritises saving.
People tend to procrastinate – in fact this has been shown time and time again to be harmful to personal finances – so taking the effort out of saving and turning into a positive habit can help. One way to do this is to open a dedicated account, give it a suitable name (if the bank offers this feature) and set up automatic deposits at the start of the pay cycle. Putting money into savings at the start of the pay cycle is known as “paying yourself first” and prioritises saving. It can be a powerful strategy.
And an added benefit to having a bigger stockpile of savings stockpile is that it might make you happier. Research from NS&I released in October 2012 finds 53% of Britons say saving improves their state of mind – and almost a third (30%) say their mood would improve if they saved up to as much as £50 more each month.