We are pleased to share with you the latest Tackling the Savings Gap research that covers UK personal savings and debt data for Q1 2014.
This quarterly barometer, one of the largest surveys of its kind, of over 2,000 UK adults of all age ranges, socio-economic backgrounds and from all corners of the country, shows the levels of confidence that people have in their finances, how much they are saving and how they are choosing to save.
Worryingly, our research shows that Britons are saving nowhere near enough to achieve a large enough fund to provide a comfortable retirement. This quarter, our research suggests the average Briton is only saving £2,338 per year, which equates to £105,228 over a 45 year working life. This will provide approximately £5,261 per year in retirement. These figures do not account for new debt or inflation that will further erode what little people are saving for retirement. No matter how you look at this situation, the average person is unlikely to have a large enough pension pot for a comfortable retirement.
The research this quarter also focused on ISAs as we have long argued that a “super ISA” would present a viable alternative to traditional pensions. The data shows that cash ISAs domination with two thirds (63 per cent) of people likely to use all or part of their cash ISA allowance this year despite the low interest rates offered by this type of ISA. Only 1 in 10 savers intend to purchase a stocks and shares ISA in 2014 that are often considered a better investment. A third (35 per cent) of Britons will not be using any part of their ISA allowance in 2014.
From 1st July the newly introduced NISAs will be a great improvement, offering savers a tax free and flexible way to invest more for their future. Simplifying ISAs and raising the annual allowance to £15,000 are two very welcome measures from the Government that are long overdue.
The full Tackling the Savings Gap can be read here.