The UK has a reputation for being one of the most innovative and technologically advanced countries globally. From finance to fashion, there is always something new for people to be excited about. But with so many options, how do we choose what is best for us?
In this blog post, we will explore some of the popular banking habits among Britons and look at what might work best for you!
What is the average amount of money saved by a British citizen?
In the year 2020, a study was conducted to determine who has saved, how much was saved, and the reasons why so many individuals do not have savings. In 2020, the average person in the United Kingdom will have £6,756.81 in savings.
Experts advise that people save three months’ by using personal finance software; many folks, however, do not have this much. 40.93 percent of Britons don’t have enough money in the bank to last a month without working.
Generational differences in savings: Average savings by age
In the United Kingdom, Baby boomers (born 1946-1964) have the most savings of any generation, with an average of £9,758.54 per person. The silent generation (born 1928-1945) has the second-highest savings, with an average of £9,497.96 per person.
The youngest generation, Gen Z (born after 1996), has the smallest savings balance, with an average of just £2,530.71. Those aged 22 to 29 are the less likely to save, with 53% having no savings.
How about a savings account in the UK?
Because of its tax-free benefits, an ISA account is the common type of savings account. But how many British people take advantage of these tax-free savings accounts, whether in the form of a cash ISA or a stocks and shares ISA?
If you’re unfamiliar with stocks and shares ISAs, they’re savings accounts that allow you to invest in stocks and shares, typically based on the level of risk you’re comfortable with.
In recent years, the total number of ISA accounts has decreased. However, the number of ISAs increased by more than 1 million accounts in 2019 to 11.2 million. The number of cash ISA accounts has increased, with 8.5 million accounts opened in 2019.
Why is it important to have a savings account?
Most traditional banks require only $25 to open a savings account, while others require no deposit at all. Most online-only banks offer their own savings strategy with a lack of opening minimums if you prefer to do all of your banking on a computer.
In terms of fees, savings accounts are less vulnerable to surcharges than checking accounts. In general, the more transactions you make on an account, the more likely you are to incur fees. Overdraft fees are unlikely if you avoid deduction from your savings, and the monthly charge of 4 to 5 euros at major banks is waived if you maintain a balance of 300 euros.
Having a savings account increases the likelihood of saving at least a portion of what you earn.
Saving money to be more financially secure in the future is a trade-off for spending money in the present. Saving goals will become more attainable and realistic if a person clearly understands what they are giving up in exchange for the benefits of saving money.