Failing to prioritise savings (despite financial instability)
New research from National Savings & Investments has revealed that Britons have not made savings any more of a priority, despite the financial shocks and economic turmoil of the past eighteen months.
The NS&I’s Savings Survey published today shows the individual savings ratio has remained constant at around 6% for the past five years. This is the average amount that people say they are saving as a percentage of their net income.
The percentage of people saving regularly each month in 2009 stands at 47%. This is only a slight increase from 45% in 2005, despite so much financial uncertainty.
This autumn, over half (54%) of people said their main savings objective was to set money aside in case of emergency. Creating a sufficient emergency fund should form a starting point for Financial Planning, after the repayment of expensive unsecured debt. Financial Planners typically recommend that their clients keep between three and six months of their typical expenditure as readily accessible cash.
Regularly saving money is an important financial discipline to develop at any early age and then maintain during your lifetime. Starting to invest money before you have established this savings habit is a bit like trying to run before you can walk.