A stark new analysis has revealed that British adults are, on average, more than £16,000 away from achieving the level of savings they believe would bring them financial security.
The Growing Savings Gap
Research conducted by the money application Plum indicates that savers feel they require roughly £40,300 stashed away to quell their money worries. However, the reality is far from this target, with most people having just under £24,000 saved. This significant shortfall is leaving many scrambling to find ways to bolster their financial buffers.
The situation is even more precarious for a substantial portion of the population. The study found that nearly one in four people have less than £1,000 in savings, while a further one in ten admitted to having no savings at all. This lack of a financial cushion leaves individuals highly vulnerable to unexpected costs and potential poverty in later life, especially in retirement.
Pressures Preventing Progress
A growing number of Britons are being forced to prioritise immediate living costs over saving for the future. Essential outgoings such as rent, mortgage payments, and utility bills are taking precedence, making it increasingly difficult for people to regularly contribute to their nest eggs.
Rajan Lakhani, head of money at Plum, commented on the findings: “Lots of people don’t feel financially secure and UK savers are conscious of the need to build up their nest eggs, ready for a rainy day. With over 80 per cent of people still not regularly putting money into their savings, the first step is to build stronger financial habits. This doesn’t only apply to those with lots of disposable income.”
Widespread Financial Stress
The savings shortfall is translating directly into anxiety for millions. The research shows that nearly 50% of people express worry over their savings, with over 20% describing it as a constant source of stress. Notably, this anxiety is not confined to those on lower incomes.
One in five individuals earning over £50,000 per year reported consistently fretting over their savings. The study also highlighted a gender disparity, with women stating they were more stressed about their finances than men. This pervasive concern has led 16% of people to believe they will never reach their savings goal or feel secure, while 23% estimate it could take them up to a decade to get there.
Despite the challenging outlook, Lakhani offers a note of encouragement: “It’s never too late to take control of your finances and implement the steps needed to bring your savings goal within reach.” The message underscores the importance of starting, however small, to build better financial resilience.
