We all know we need them, and we all have great intentions in getting some, however, sometimes your bank balance will only stretch so far.
So just what is the UK savings situation?
Santander conducted a survey on this very subject and found the following; the average Briton saves £150 a month, 20% don’t save a penny, and the ‘somewhere in-betweens’ save around £50 monthly. Okay, so we’re not seeing huge sums here, but god loves a tryer doesn’t he?!
Why are we as a nation finding it so very hard to save? Well, we’ve been hit with a rather unfortunate double financial whammy over the last few years – rising inflation and salaries that are remaining flat – this means we’re pretty much squeezed for every penny. (Tell me something I don’t know!).
Now before you panic and reach for the piggy bank, savings aren’t necessarily the safe bet they used to be anyway. As well as the financial knocks just mentioned, interest rates are also hitting record lows, meaning you receive a measly return on the money you’re saving. Currently, the average rate for a savings account is a staggering 0.13%. Not to worry, we’ll bung it all into a nice little savings ISA. The average return rate on these is 0.38%. Maybe not then.
So what in God’s name is the alternative? As an investing platform, you can probably guess what we’re about to say. But, when you look at this little stat, you may find yourself that bit less cynical.
An investment of £50.00 every month into the FTSE100 over the last 30 years, would now be worth £94,450. (Association of investing, 2016). This is based on the general return you could have expected to receive over the last 30 years, and so could have been a little lower, or a little higher. With this in mind, putting your hard earned cash in an account that gives you sod all might not seem so appealing.
Either way, when it comes to saving for your financial future our advice is always this. It’s not how much you do, but when you do it. In this financial climate, the sooner the better. Start small, it’s the starting that counts.