Increase in cost of living causes two fifths to reduce or stop regular saving

Over two fifths (42%) of UK adults say the increase in the cost of living has meant that they have reduced or stopped any regular savings.

A survey of 2,000 UK adults was conducted by WEALTH at work, a leading financial wellbeing and retirement specialist and looked at people’s savings habits. It revealed the importance of saving is recognised by many, with a third (33%) saying that they regularly cut back on spending to make sure they add to their savings.

However, nearly half (45%) of UK adults say that they prefer to save what they have left at the end of the month rather than have savings come out at the start of the month. As spending increases with the cost of living, it is no surprise that people will have less available at the end of the month to save.

Half of UK adults (52%) are confident that they have enough savings set aside for emergencies, but the survey also found that half (50%) of UK adults know they should be saving more, not just for emergencies.

Jonathan Watts-Lay, Director, WEALTH at work, comments; “It’s very concerning that people are having to reduce or completely stop their saving in an attempt to free up money to pay for ever increasing bills. Many people do understand the importance of saving, and are careful with their spending to ensure they can add to their savings, but it appears that this is a something many can no longer afford.”

He explains; “It is completely understandable that employees may need to cut back on their savings, but instead it may be better for them to reduce how much they save to what they can still afford rather than stopping it completely. Saving money is a habit, and once stopped, it is very difficult to start up again.”

Watts-Lay adds; “There are some practical steps that employees can take to save money that they may not yet have considered yet, to hopefully protect any savings they may have. This includes checking all outgoings to find ways to cut costs e.g. cancelling any unused subscriptions or memberships, shopping around for better deals on TV, broadband and mobile suppliers, and switching brands on their regular shop. Rising energy costs are a big concern so things like avoiding tumble dryers, utilising smart heating, using more efficient light bulbs, and finding cheaper ways of cooking such as using a slow cooker or microwave can all help. It’s always a good idea to look out for online discount vouchers for any purchases, and it’s also an ideal time to remind staff of  cost savings available as part of their benefits package e.g. discount on parking, shopping, car leasing, medical care and insurance.”

He comments; “As part of an overall wellbeing objective, many employers now offer their workforce support. This includes providing financial education workshops, one-to-one guidance or coaching and digital tools and helplines. This can help employees to build their financial resilience now and for the future, so that they are better equipped to withstand any financial shocks.”

The survey of 2,000 UK adults was carried out by Opinium from 8 – 11 April 2022.