How Much Do Brits Save on Average by Age?

Understanding how much money Brits save on average can provide valuable insights into financial habits across different age groups. Recent studies reveal that savings vary significantly, with younger individuals typically having lower amounts compared to their older counterparts. This article explores average savings by age group in the UK and offers practical tips for enhancing personal savings.

Last updated: 10 October 2023 (BST)

Key Takeaways on Average Savings by Age Group

• The average savings for individuals aged 18-24 is £3,636.
• As of 2023, those aged 35 and older have an average savings of £5,714.
• Individuals aged 50-59 report average savings of £18,245.
• Over 90% of those aged 75 and above are retired, with average savings reaching £36,940.
• Simple savings methods can significantly impact long-term financial health.

Understanding Average Savings by Age Group

Saving money can be a sensitive topic for many. Various factors, including income and life circumstances, influence how much individuals manage to save. According to a study by Finder, the average savings amounts for different age groups reveal intriguing patterns in financial behaviour.

Savings for Young Adults: Ages 18-24

For those aged 18 to 24, the average savings amount is approximately £3,636. This age group is often in the early stages of their careers, which reflects in their savings capabilities. A striking 59.9% of individuals in this bracket have less than £1,000 in savings, while only 3.8% boast savings exceeding £10,000.

Current average annual salaries for this age group range from £24,440 to £32,292, depending on hours worked. With financial pressures like student loans and living expenses, it’s common for younger adults to struggle with saving. However, employing strategies like the 50/30/20 rule can help them allocate their income more effectively.

Savings for Young Professionals: Ages 25-34

The situation improves slightly for those aged 25 to 34, where average savings rise to £3,748. Here, 59.2% of individuals still have under £1,000 saved, but the percentage with over £10,000 rises to 8.6%. The average salary for those at the lower end of this age group is around £32,292, increasing to £39,988 for those aged 30-34.

As individuals progress in their careers, they often find better financial stability, which aids in increasing their savings. This is an ideal time for young professionals to adopt robust saving strategies and focus on long-term financial goals.

Savings for Established Adults: Ages 35-44

Individuals aged 35 and older report average savings of £5,714. In this age group, the percentage with less than £1,000 drops to 50.8%, while 12.4% have savings exceeding £10,000. Average earnings for this demographic are about £39,988 for those up to 39 years old and £42,796 for those aged 40-49.

Many factors contribute to increased savings during this period, including career advancements and increased job stability. However, it’s also a time when expenses may rise, such as mortgages and family costs, which can impact the ability to save.

Savings for Pre-Retirement: Ages 45-54

For those aged 45 to 54, the average savings amount increases significantly to £9,402. In this demographic, only 44% have less than £1,000 saved, and the percentage with over £10,000 grows to 15.5%. Average salaries remain high, making it a crucial period for building a substantial financial cushion before retirement.

As individuals approach retirement, focusing on savings becomes critical, especially considering that average salaries begin to decline after age 50 due to various factors such as early retirement or part-time work.

Savings for Older Adults: Ages 55-64 and Beyond

Individuals aged 55 to 64 have average savings of £18,245, with 37.9% having less than £1,000 and 27.5% boasting over £10,000. Although average earnings drop to around £40,456, many in this age group are focused on maximising their savings before retirement.

As people enter their 60s, the majority are retired, leading to a significant increase in average savings for those aged 65 and above, which reaches £36,940. In this group, 17.8% have less than £1,000 saved, while 44.6% have over £10,000. The ONS reports that 94.4% of those aged 75 to 84 years are retired, making it clear that savings play a vital role in their financial wellbeing.

Strategies for Boosting Your Savings

Understanding average savings by age group is beneficial, but applying effective savings strategies is crucial for personal financial growth. Money saving expert Matthew Sheeran from Money Wellness shares valuable insights for those looking to enhance their savings.

The Importance of Starting Small

Sheeran emphasises that it’s vital not to pressure yourself into saving large amounts immediately. Even saving £1 or £2 daily can accumulate to a significant amount over time. The key is consistency and commitment to saving, no matter how small the initial amounts may be.

The Envelope Method: A Practical Approach

One recommended method for saving is the envelope technique, also known as cash stuffing. This involves withdrawing your earnings as soon as you get paid and allocating specific amounts to different spending categories, such as food, travel, or entertainment. This method can help provide a clear understanding of how much money you have available, which promotes disciplined spending and saving.

Saving What You Didn’t Spend

Another effective strategy is to save any money you didn’t spend. For example, if you receive a discount on a purchase or cancel a subscription, take that money and transfer it directly into your savings. Since you didn’t budget for it, this can be a painless way to enhance your emergency fund or savings account.

What Happens Next?

As financial landscapes continue to evolve, it’s crucial for individuals of all ages to stay informed about their savings and investment options. Whether you’re just starting out or nearing retirement, understanding where you stand in comparison to your peers can empower you to make informed financial decisions.

With a firm grasp on average savings by age group and effective strategies to improve personal finances, individuals can work towards a more secure financial future. Are you ready to take control of your savings? Start today!

#Savings #FinancialLiteracy #MoneyManagement

FAQs

What is the average savings for adults aged 18-24 in the UK?

The average savings for UK adults aged 18-24 is approximately £3,636, with a significant portion having less than £1,000 saved.

How can young professionals increase their savings?

Young professionals can increase savings by following the 50/30/20 rule, budgeting effectively, and adopting saving strategies like the envelope method.

What age group has the highest average savings in the UK?

Individuals aged 55-64 have the highest average savings, reporting around £18,245 on average.

What is the envelope method for saving?

The envelope method, or cash stuffing, involves withdrawing your entire paycheck and allocating cash into envelopes for different spending categories, promoting disciplined spending.

How can I save money without affecting my budget?

You can save money without affecting your budget by setting aside savings from discounts or unplanned income, as this money is not typically allocated in your budget.