Savings woes for millions prompts demand for Government action

The consumer group believes that there are 14 million people who could save more with the right encouragement (Getty Images)

Half of us are unhappy with the level of savings we have while a quarter of us have no savings at all. The worrying figures are included in a new Which? report published today which looked at attitudes to saving.

The consumer group reckons there are 14 million people who could save more with the right encouragement, and has called on the Government to set up a national savings strategy to help.

The Government recommends households have at least three months’ of essential expenditure to protect against sudden shocks to income. Households without that buffer are significantly more likely to have defaulted on a payment in the last month, or have resorted to high-cost credit like payday loans.

Which? executive director Richard Lloyd said: “With half the population unhappy with their level of savings, and a financial buffer so crucial, we’re calling on the Government to help get the UK saving.”

The report suggests that there are 11.5 million people who struggle to save regularly, and a further 2.5 million who don’t save, but could afford to. Both groups could be encouraged to save more, the report says.

The key to successful saving, according to the research, is to do it regularly while keeping the cash that builds up in a separate account, so there’s less temptation to dip into it.

There are 7 million in the UK the report calls Habitual Savers. “They are less likely to have specific savings goals and have a strong belief in the importance of saving, making sure they save regularly,” the report says.

Which? says it has shared its findings with the British Bankers’ Association, which is currently consulting on how to improve the savings culture in the UK.