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Despite being the UK’s biggest savers, Londoners’ fickle saving habits could see them shaken by unexpected costs

  • New Barclays research uncovers regional spending and savings habits across the UK
  • Savers in Northern Ireland set aside the highest percentage of their monthly disposable income
  • Savers in the North West are the best at resisting temptation, being least likely to dip into their savings
  • Millennials are twice as likely as any other age group to spend their savings on clothing

The research¹, which assessed regional spending and saving habits across the UK, shows that London-based savers deposit an average of £539 into their savings account in a typical month, almost three times more than savers in the North East, who deposit £181. However, Londoners are also the most likely to dip into those savings, with 44 per cent admitting to using their savings to fund their lifestyle in the past 12 months. On top of that, only 11 per cent of Londoners are actively saving into a rainy day fund, which could see their main savings goals jeopardised by unexpected costs, such as a boiler repair or car breakdown.

Across the UK, savers in Northern Ireland are the most frugal, depositing an impressive 29 per cent of their monthly disposable household income2 into a savings account. Savers in the North West are the most steadfast, with 71 per cent refusing to dip into their savings in the last 12 months.

In terms of savings goals, Northern Ireland is the most forward-looking region, with 23 per cent citing retirement as their main savings goal. On the other hand, savers in London are the most likely to spend their savings on clothing (27 per cent), and savers in the East of England are the most likely to be saving for a holiday (15 per cent).

Nationally, millennials (18-24 year olds) are twice as likely as any other age group to spend their savings on clothing. They also dip into their savings an average of 14 times per year, above the national average of ten times. This is the complete opposite of baby boomers (aged 55+), who only touch their savings about seven times a year, prioritising their savings for high-ticket purchases such as a car or a holiday.

The three regions with the highest take up of investment ISAs are London, the South and Scotland, indicating a higher appetite for risk than savers in the East of England, who hold the highest percentage of fixed rate cash ISAs.

Clare Francis, Savings and Investments Director at Barclays commented: “It’s important people are able to stay in control of their money, so it’s heartening to see that almost two thirds of all savers have been able to avoid dipping into their savings in the last 12 months.

“Given the low interest rate environment, those who have built up a decent amount of cash savings and have extra money they can put away for five years or more may want to consider opening an investment ISA. Over the longer term, shares tend to perform better than cash; according to the Barclays Equity Gilt Study3, over the past 116 years the average annual return for shares has been 5 per cent after inflation, while for cash it has only been 0.8 per cent. However, there is greater risk involved as the value of your investments can rise as well as fall, so you could get back less than you initially invested.”

Notes to editors

Clare Francis’ top tips for maximising your savings and staying in control of your finances:

  1. Pay off expensive debts

    Your first step on the path to financial health is to wipe the slate clean. Old debts can restrict your spending freedom and dampen your savings goals for 2017. Check the interest rates on your outstanding debts and pay off the most expensive first. Consider transferring debt onto a 0% credit card or lower rate personal loan, which will save you from paying over the odds in interest.

  2. Quit bad spending habits

    Cut back on treats that offer immediate and short-lived gratification by thinking about your bigger savings goals. Keep track of the savings you are making to keep you motivated, and transfer the money you save into a savings account – that way you’ll really see how it adds up.

  3. Get into a regular saving habit

    Whether it is little and often or large and occasional, adopt a realistic timeline of when and how much you would like to save. Setting up monthly standing orders into your savings account and earmarking key spending dates in your diary (such as birthdays or trips away) will help you achieve your saving goals in the long-term. Tools such as Barclays Finance Manager can help with effective money management and setting savings goals.

  4. Brush up on ISAs

    An ISA (Individual Savings Account) is a tax-free way to save or invest. The total 2016/17 ISA allowance is £15,240, rising to £20,000 for the 2017/18 tax year, and you can split your allowance between the different types of ISA, such as cash or investment ISAs, also known as stocks and shares ISAs, however you like. It’s important to make a note of key dates, such as tax year end on April 5th, to help you organise your finances and make the most of your ISA allowance before the end of the tax year – it’s a case of use it or lose it! Barclays current account customers can open an investment ISA through their online banking account, as part of the bank’s new direct investing service.

  5. Avoid having too much in a rainy day fund

    The standard advice is that you should have three times your monthly outgoings in an easy access savings account in case of emergency, but if you have more than that in savings you could be missing out on extra interest. So take a look at how much you’ve got in savings, and once you’ve built up that emergency buffer consider putting any extra money somewhere else.

  6. New support available for first time buyers and home-movers

First-time buyers can open a Help to Buy ISA, which gives a 25 per cent government bonus on amounts saved between £1,600 and £12,000. For those ready to buy, Barclays Mortgages has just launched the Barclays Homebuyer Cashback Mortgage, designed to help first time buyers and home-movers recover the cost of stamp duty on their new property purchases.

References

1 Global business intelligence provider, RFi Group: Q4 2016 UK Savings Council survey, which was in field in December 2016. In total, 2,088 retail banking consumers were interviewed online. All respondents had one or more savings accounts (N=1,936) or intentions to open a savings account in the next 12 months (N=152)

2 Regional gross disposable household income (GDHI): 1997 to 2014, published by the ONS in May 2016

3 Barclays Equity Gilt Survey 2016

About Barclays

Barclays is a transatlantic consumer, corporate and investment bank offering products and services across personal, corporate and investment banking, credit cards and wealth management, with a strong presence in our two home markets of the UK and the US.

With over 325 years of history and expertise in banking, Barclays operates in over 40 countries and employs approximately 130,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide.

For further information about Barclays, please visit our website www.home.barclays .