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Saving is back in fashion

Saving is back in fashion

There is a gradual but growing trend for young people to save more, Fiona Matthews has claimed.

The managing director for Towers Watson Master Trust has revealed that there has been a transformation in the attitude of younger people towards saving.

She said: “In the UK, from the post-war boom in the 1950s onwards, there has been a gradual but growing trend for the youngest generation of adults to spend more of their income in the present and to save less for the future.

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“However, this generational attitude towards saving may well have peaked sometime over the past few years. This change – if it lasts – is to be welcomed. We were facing an unsustainable situation – particularly with an ageing population and increasing life expectancy.

“Young people are now showing a more responsible attitude towards saving, and this will have an impact on society and the pension and financial services industry.”

Ms Matthews’ comments came as research from LifeSight, the UK DC master trust from Towers Watson, revealed that, out of 5000 employees, 18-24 year olds were the most enthusiastic savers, having squirrelled away an average of 10.9 per cent of their salary in the past year.

Adviser view

Chris Daems, director of Essex-based Cervello Financial Planning, said: “While auto-enrolment is now three years old, it’s still relatively young legislation and therefore hasn’t had much of an impact yet.

“However, when you look at how younger savers engage with money in parts of the world where an auto-enrolment-style arrangement has been in place for some time, there is evidence to suggest that AE will have a definite effect on savings engagement as time goes on.”