Savers do not want to put money in the bank or a pension for retirement, according to a new study.
More than half say their day-to-day spending commitments make saving much almost impossible, while three out of four would prefer to divert any spare cash to paying off their debts.
And 51% confess that the money they have saved is often spent on unexpected bills or emergencies, says research by Lloyds Bank.
Despite these cash flow problems, the good news was seven out of 10 savers believe they will achieve their long-term financial goals and are keen to set some money aside for their retirement.
Saving enough money for retirement is a priority for 27% of savers, which rises to two-thirds of the 55 to 65-year-old age group.
Save the Change
Younger savers are more intent on saving to buy their own home – the priority for 34% of 18c to 34-year-olds.
“Buying your first home is an important milestone and it’s encouraging that so many young people are focused on achieving it,” said Mark Rawcliffe, head of savings at Lloyds Bank.
“Having a long-term savings goal and focusing on something that you want in 5 years, 10 years, or in retirement, can help motivate you to achieve it. We encourage customers to get into the habit of saving regularly.”
One idea from the bank to help start that savings habit is ‘Save the Change’ which suggests you round up what you spend to the nearest pound each time you go shopping.
“Saving some money each month could be helpful should a rainy day, or an unexpected bill, come along,” said Rawcliffe.
The bank asked 2,000 account holders for their views on saving for the study.
Bank rates bust inflation figure
In a separate report, web site Moneywisepoints out that 21 savings accounts now offer interest rates that beat inflation.
The latest cost of living increase data from the Office of National Statistics listed the inflation rate as 2.5%.
The report does say that the number of accounts with better rates is improving because the inflation rate is falling rather than financial institutions offering better deals.
Several five-year fixes offer a rate of 2.65%.
