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New research finds that millions of people have less than £100 in savings
A new study by the Money Advice Service (MAS) has found that more than 16m people in the UK have savings of less than £100. It is a worrying new statistic that has seen many consumer groups become concerned about the financial situation of some of the UK population.
Five areas in particular have been highlighted as having a high percentage of people with savings under £100. Those areas of the UK are: Northern Ireland (56.8% with no savings), the West Midlands (55.2%), Wales (50.1%), North East England (50.7%) and Yorkshire and Humber (50.9%).
The MAS has said that the findings of their study are worrying and present a particular challenge for low earners. Nick Hill, money expert at MAS, said; “These figures show the millions put at risk by the saving gaps in the UK… For some on low incomes, saving is a real challenge as they may simply lack the income needed to save at all.”
However, there was some good news to come out of this new study as it has shown that some people are managing to save money even though they are on a low income. Around a quarter of adults who have a household income below £13,500 do have more than £1000 in savings.
Basic rate taxpayers (those who earn over £11,000 up to £43,000) are now allowed to earn up to £1000 a year in savings without paying income tax. So not only are some people on low incomes managing to save, they are managing to take advantage of their tax free savings allowance.
To help those on low incomes manage their money and learn to save, the Money Advice Service started a project to teach people how to save. It is a scheme that has seen great success as MAS encourages saving small amounts on a regular basis as they believe this is more achievable for most people.
Nick Hill has this to say about MAS’ approach to savings; “Regular saving is key to building up that buffer against those life surprises,”
Even though these statistics are worrying, there are some positives to be taken from what MAS has discovered about the savings picture of the UK population. If you are struggling to save, then there are some steps you can take to improve your chances of saving more money on a monthly basis.
- Work out a monthly budget – if you know what is coming in and what is going out and when this is happening, it gives you a better picture of your finances and where you could potentially save yourself some money.
- Look at ways to cut your costs – earning more money through wages or extra income can be difficult so cutting costs is the best way to increase the amount of money you have per month. Try to reduce bills by switching providers and cutting down on unnecessary spending such as lowering food bills and limiting spending on holidays, social events etc.
- Claim all the benefits you are entitled to – it is easy to check what you are entitled to in terms of benefits. It may be a one off payment or a regular income but regardless it is extra money to help to raise your income that you can then put towards your savings.