The young need help to get in the savings habit: SW

The 38-page Savings Report 2014: Planning for Real Life, revealed that people aged 49 and under were the most likely to have nothing saved up, and younger people thought of long-term saving as being five years or less.

The statistics, taken from research conducted by YouGov who interviewed a total of 5,221 adults between, showed that the UK’s savings habit has been eroded, with 23 per cent of adults stating that they had no savings, and 19 per cent stating that they have never saved.

The number of people having savings fell from 69 per cent in 2012 to 67 per cent in 2013, despite better prospects for employment, wage growth, property prices and economic upturn being cited by the Bank of England and the Office for National Statistics.

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Despite the economic outlook, people’s feelings of weath have dissipated over the past year, with the average total year’s savings reaching just £2845 - nowhere near a 5 per cent deposit for the average house in London or the South-East.

Worryingly, the 18-34 year olds admitted they were more willing to take risks with their cash to get a better return - 73 per cent of them stating this - but 24 per cent are in debt, so do not save, 42 per cent think that long-term means five years or less and 40 per cent of them are in a Cash Isa.

The report said: “Clearing this debt and establishing a savings habit is clearly a sensible long-term financial goal for this group.”

Women also are less well-off when it comes to saving - and having enough to save.

According to the report, women earn an average £8,000 less than men a year, tend to spend less and carry £500 less debt a month than men.

However, they are worried that they have “nothing to save for” or are worried that they might need their money in the short-term.

The report said: “Women are more conscious they are not meeting their long-term savings targets than men, at 39 per cent compared with 29 per cent.

“This is perhaps another part of what is driving them to improve their savings, despite the significant income difference between the genders and the barriers to savings that this presents.”

In a foreword to the report, Caroline Rookes, chief executive of the Money Advice Service, said: “We aim to give people the tools they need to spend a bit less, save a bit more and plan a bit better for whatever life throws at them.”

She spoke briefly of the UK strategy for financial capability, which is going through a consultation process at the moment, adding: “The financial services industry is playing a full and active part in this collaborative process, and the contribution firms can make is often invaluable.

“This report serves as a powerful reminder of the scale of the challenge.”