You are here: Home - Saving & Banking - News -

Millennials get the savings habit

Written by:
Millennials are not, as it turns out, spending all their money on partying and shoes, but diligently saving for their future, a survey reveals.

18-24-year-olds save more of their pre-tax income than any other group, at 10% of their pre-tax income, according to the new annual savings index from Aldermore Bank. Three quarters (74%) of this age group save regularly, compared to 69% nationally. Over half (56%) of savers in the UK do not feel they’re saving enough and almost a third (31%) of people are not saving at all.

There are also regional differences: Londoners may be the highest earners, but they are only saving a slightly higher ratio of their income compared to the lowest earners (Wales).

On average, Brits are putting away around 8% of their pre-tax income, equivalent to £1,832 annually, or £153 a month. Most are not deterred by low interest rates, with only one in ten saying it puts them off saving. One in ten (9%) non-savers would rather spend the money they earn on living life. Those in the North East are less likely to save than any other region.

The research shows that those earning over £40k put away 10% (£5,785) of their income, while those earning up to £10,000 a year are managing to put aside 15% annually (£759). That said, those on a higher income (over £40k a year) are more likely to save regularly, with over a third (36%) saving on a monthly basis (compared to the national average of 29%).

The findings echo worldwide surveys that show millennials are among the most diligent savers. A recent report from Ascensus in the US found millennials are beginning to outpace older generations in terms of saving. Young employees are proactively participating in their employer’s retirement plans early in their career.

Simon Healy, managing director – savings, at Aldermore, said: “Our new analysis shows that for the majority, the savings message is resonating, despite the low rate environment over recent years. It is encouraging to see that people on low incomes and the younger generation are actually some of the best at saving, the earlier people start savings the quicker and better chance they have of reaching their savings goals in later life.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week