Britain has found a saving grace after years of living on credit cards and borrowed money, according to a new survey from HSBC Bank.
Following the banking crisis in 2008, households have gradually switched from credit to saving.
Now, says the survey, 43% are saving regularly and many savers are looking for financial options that give a better return than cash on deposit due to low interest rates.
The average savings pot is up 15% over the past 12 months – from 317,664 in 2013 to £20,844 this year, says the bank.
The research also shows that more people have topped up their savings than drawn down cash.
Saving habits revealed
The split is modest – 51% compared with 49% – but still represents a rise of more than a third from 2013.
The bank also revealed fewer households are withdrawing more than they saved. One in four took more money out than they put in, a fall of a third compared with a year ago.
Although more households are saving, many still cannot afford to make big increases in the cash they put aside.
Around 43% make regular savings contributions – up 3% from last year.
However, most (57%) still make irregular contributions when they have surplus cash, a nudge of just 1% up from 2013.
On average, 75% of households manage to save at least £100 a month.
The bank research also found that although cash deposit accounts are still popular with the majority of savers, more households are looking at alternative ways to save their money.
Londoners top savings league
The general split of savings is:
- 50% cash
- 31% stocks and shares
- 12% alternative assets
- 7% bonds
Investments in stocks and shares has grown by 40% during the past 12 months, from an average of 34,560 to £6,391, but cash in the bank or building society is still the most popular way to save.
The bank said the survey showed Londoners have the most savings – an average £23,633 and twice as much as those in the North West, who have the lowest average savings of £11,134.
HSBC head of savings Oliver Cook said: “It’s good that people are putting more money into savings. Saving regularly, whether as cash or into an ISA or pension is a good habit and even putting a little aside each month pays off in the long run.”