Cost of living squeeze puts brakes on savings

29 October 2013

One in five savers* (21%) have less than £500 put aside, with one in ten (11%) having less than £100 in savings. In fact, many savers are also having to regularly dip into what savings they have, with a third (34%) having to dip into their savings at least once a quarter according to research from Nationwide Building Society.

Nationwide found that although nearly nine in ten people (86%) think saving is important, three in five (62%) people claim they cannot afford to save at all or cannot save more than they already are. One in ten people (11%) do not save at all while over a quarter (27%) do not save on a regular basis.

Of those currently saving, half (48%) are taking advantage of the tax-free benefits of a cash ISA. The research suggests being able to access their money as and when they wish may be important to savers with 41% holding an instant access account, but just 9% of savers were prepared to tie their money up in a fixed rate bond despite the fact that such bonds tend to offer higher rates of interest.

Darren Bailey, Head of Savings Pricing at Nationwide Building Society, said: “The rising cost of living continues to impact family finances and despite wanting to save, many are finding they just don’t have the spare money.

“Yet, even putting a small amount aside each month can produce a decent nest egg which can give families funds to fall back on should they need too.

“The needs of each individual saver will differ and its important that people find the best account to suit their needs. One of the most important factors for savers when selecting a savings account is being able to access their money as and when they need to with the majority opting for a cash ISA where interest can be earned tax-free.

“Although the economic climate may not be ideal for savers, nearly nine in ten people continue to value the importance of putting money aside for a rainy day.”

Notes to editors:

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,074 adults. Fieldwork was undertaken between 11th and 14th October 2013. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

* Those who put money aside for savings, excluding pensions and other long-term investments

About Nationwide Building Society
Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million members.

Customers can manage their finances in a branch, on the telephone, internet and post. The Society has around 16,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

Please note: If you are a customer looking for information on our products and services, please visit the main website.