UK savings crisis: Gap widens between those who can and cannot save

The findings show one in five (19%) UK adults, potentially almost 10million people, admit they have less than £100 in savings and more than one in ten (13%) have no savings at all to fall back on should an unexpected expense occur, those numbers remaining unchanged for three years.

The financial resilience research compares the changing financial behaviours of UK adults over the last three years, and the latest figures draw attention to the UK’s widening financial wellbeing gap – the gap between non-savers and savers.

A quarter (26%) of UK adults say they have had to dip into savings in the last month to cover regular expenses and half (51%) can’t afford to save anything. In addition, two-fifths (40%) admit to falling behind with loan repayments in the last 12 months and a quarter (24%) say they couldn’t afford for their outgoings to go up by more than £100 a month.

At the other end of the scale, those who are saving are putting more away. The average Brit now saves £379 each month, more than double the £167 they were saving in 2021.

The amount people have in savings has also tripled from an average of £8,253 in 2021 to £25,020 today, with those in London seeing the biggest increase to their nest egg, growing by almost five times from £8,935 to £42,836. Those living in the East Midlands had previously had the lowest average savings balance a £6,133, however they now sit with an average of £24,191. Those living in Scotland have the lowest average nest egg at £15,143 however that figure has still almost doubled from £7,960 in 2021.

Despite the increase to people’s saving balances, half of people (48%) said they have felt stressed over their finances in the last year.

Recent data[ii] released by the Building Societies Association detailed that three quarters (76%) of the population were confident they could save £10 or more a month for the coming year.

Chris Irwin, director of savings at Yorkshire Building Society, said: “Our new research continues to highlight just how fragile many people’s finances are with the shocking figure that nearly a fifth of all UK adults have less than £100 in savings. It also shows the further widening of the gap between those that can save and those that can’t in the UK. While we know it can be hard for people to put money away, especially with rising living costs, we mustn’t overlook the impact saving has on people’s financial and mental wellbeing.

“It’s positive to see that those who are able to save are managing to save more, and we hope those who have increased their savings will maintain good money habits and grow their savings safety nets.

“One of the things the last few years has demonstrated is that anyone could find themselves in financial difficulties and may need to rely on savings -which is why it’s positive to see that the majority of people feel they could put as little as £10 a month away a month -we want to continue to help people build a healthy savings pot and improve their financial wellbeing and in turn their overall mental wellbeing.”

Yorkshire Building Society has a range of support tools available to help people build their financial resilience and take practical steps to saving more. To find out more, please visit the Society’s Website.