New research by Aviva says 1 in 4 UK families have less than £95 in savings

Independent wrote:One in four UK families have less than £100 in savings as wealth gap widens, research finds

The savings gap between low and high income families has increased 25 per cent year-on-year, from £50,072 to £62,790

Low income families in Britain hold an average of just £95 in savings and investments, compared to a mean £62,885 that higher income families have, according to new research, which highlights the widening gap between rich and poor.

According to insurer Aviva’s Family Finances report, the savings gap between low and high income families has increased 25 per cent year-on-year, from £50,072 to £62,790, with UK households facing increased financial pressure from stalling incomes and savings, combined with rising debt and inflation fears.

Low income families typically had £95 in savings this winter compared to £136 the same period last year. Among high income families, savings jumped to £62,885 from £50,072 last year.

One in four UK families are classed as low income, with earnings of less than £1,501 a month, according to Aviva, while about 8 per cent earn £5,001 a month or more, putting them in the high income group.

“The gulf between low and high income families is showing signs of widening, in a worrying indication that those less fortunate are finding their finances increasingly stretched,” said Paul Brencher a managing director, at Aviva UK.

Overall savings across all UK families fell to their lowest level in 18 months this winter, likely a result of average monthly famiy incomes falling to a two-year low of £2,006, according to Aviva's research.

Home ownership is also declining, with 64 per cent of all families owning their own home – a four-year low—with low income families the least likely to own their homes at 41 per cent.

“Although mortgage rates are at record lows, qualifying for these deals and getting a deposit can be difficult for those with limited household income or unusual circumstances. Britain’s broken housing market means becoming a homeowner is a distant dream for many families and government plans must swiftly be turned into action to stem the tide of inequality” Mr Brencher explained.

“With inflation climbing fast, families are understandably concerned about the impact of rising prices on the household purse. Poor returns on savings and rising inflation means families could well see their safety net eroded if they don’t keep up regular contributions and try to boost savings pots whenever possible,” he added.

Chancellor Philip Hammond last week stressed that he understood cost-of-living concerns of millions of families as inflation hit a two-and-a-half-year high.

The 12 Poorest Cities in the UK

12. Wigan
11. Stoke-on-Trent
10. Blackpool
9 Bradford
8. Middlesbrough
7. Dundee
6. Grimsby
5. Kingston Upon Hell
4. Blackburn
3. Bolton
2. Burnley
1. Rochdale

http://www.independent.co.uk/news/busin ... 89341.html

That is a shocking (apparent) statistic. Basically if they lost their job they'd presumably be in the gooseberry fool within days.

Any long-term savers here, or perhaps those who are equally struggling as those in this report?

Legitimately scary. The obvious geographical correlation doesn't surprise me though.

I have a fair bit in savings as I've been made redundant twice due to companies going bust (one was Wollies that I didn't expect to go under when I started working there) so always expect the worst and hope for the best.
It always amazes me when I see people at work with zero savings who get in trouble at the slightest bump in the road or breakdown of something like a car or their precious phone.

So that's why NickSCFC didn't buy an Xbone.

I've always had the save mentality, even when it makes you look THOROUGHLY BORING to everyone else. I just like knowing that I'm either going to be financially secure when I'm old and I can go about traveling like Rick Stein, or were everything to epically fall apart now I'd have a substantial buffer zone and adequate leeway to sort everything out. It's money that at the moment I just mentally write off as if it doesn't exist.

It's worse for those with no family to back them up either. With no savings, and say you're renting, you could easily go from riches to rags within hours. I know people that burn through their money seemingly with no grasp of 'yeah, but what if they fired you tomorrow...'

Unlike most, I rarely do debt or loans either. I may use a finance scheme for a new laptop for example if desperate this year, but otherwise I prefer paying everything off there and then. And yes, sometimes that means waiting because I can't have it RIGHT NOW but I'm reasonably okay with that.

Loads of those are in greater Manchester, including Bolton where I live, and this dosen't suprise me at all. Loads of crap, gooseberry fool paying jobs, and uneducated people who are crap with money. I'm basically on minimum wage, but I've been able to save a few grand this last year by basically almost never going out, but it'll be years before I could afford a house. I work with so many people who are scraping by, and can barely survive a month and pay off some of their credit card, let alone save a bit too. They're stuck in a cycle, and I genuinly have no idea how they're going to get out of it.

And it's not going to improve when we leave the EU either. Many of these people have basically voted for price increases on everything while already struggling. And they were repeatedly told 'We are going to put these prices up'. Mind boggling when paired with these new figures.

When I mentioned the amount of money had put away to one of my co-workers they looked at me as if I was crazy. There first reaction was "Why don't you go on holiday or buy a new car?". They did not seem to understand the concept of keeping money for security or saving for delayed gratification.

That said, many of them have additional pressures that I do not such as children and probably cannot afford to save anything.

I used to be like that with money, I had large loans and thousands owed on credit cards. Lots of holidays, shopping and nights out. I had a great time. It wasn't that I was ignorant of what debt was, I just didn't care and had no responsibilities to make me stop and think.

But slowly the mountain of debt started to crush me and I changed my ways. It was difficult and took a long time but I have been debt free (other than a mortgage) for a few years now.

It feels good to not be in debt but at the same time I miss the 4 or 5 holidays a year. :lol:

KKLEIN wrote:
Independent wrote:...

The 12 Poorest Cities in the UK

...
5. Kingston Upon Hell
...

. Now that really does sound lke a bad place to live.

You can always afford to save something.

I put away at least 1/3 of my pay each month, and use 0% credit cards for most non-essential purchases and average out the repayments. It's taken a while to learn my limits on this (and control my spending enough not to rack up huge amounts on credit cards that'll need a high monthly repayment even at 0% interest), so I'm working on clearing all of my outstanding credit cards, I've got 3 left to get through.

With some restraint I find it a better way to save as opposed to just spending a chunk of savings, as then your savings can continue to accumulate and you really get the mentality that the money should pretty much never be touched. Downside is it's easier to justify buying something you don't necessarily need too.

Holpil wrote:You can always afford to save something.

I put away at least 1/3 of my pay each month, and use 0% credit cards for most non-essential purchases and average out the repayments. It's taken a while to learn my limits on this (and control my spending enough not to rack up huge amounts on credit cards that'll need a high monthly repayment even at 0% interest), so I'm working on clearing all of my outstanding credit cards, I've got 3 left to get through.

With some restraint I find it a better way to save as opposed to just spending a chunk of savings, as then your savings can continue to accumulate and you really get the mentality that the money should pretty much never be touched. Downside is it's easier to justify buying something you don't necessarily need too.

Can you though?

To use a basic example in Ireland, the hourly wage (€10.75)for a security guard with 3 years service hasn't changed in 6 years( I used to work in that industry). Even if you were managing to put away a little bit 6 years ago it'd be damn near impossible now due to price increases in food,rent, insurance, utilities etc.

jawafour wrote:
KKLEIN wrote:
Independent wrote:...

The 12 Poorest Cities in the UK

...
5. Kingston Upon Hell
...

. Now that really does sound lke a bad place to live.

It should be renamed to that.

Horrible place.

I've had similar experiences with people in the past whenever savings come up. I have a lot of money put away (which will soon be used to put a deposit down on my house). People look at you like you have two heads if you save anything.

That's not a growth wrote:Loads of crap, gooseberry fool paying jobs, and uneducated people who are crap with money.

Personal finance really should be mandatory at school. People can't be expected to be savvy with money and savings if they have so little clue about the somewhat complicated systems we live through. This isn't derogatory - financing is difficult, and I know I came out of school with practically zero knowledge. I still know very little. Luckily I'm intelligent enough to pick up what I need to know, but it can be hard.

People leave school after A-levels and in the eyes of the state are suddenly expected to know how to pay taxes, how to budget for themselves, how to vote in elections, and how to do a multitude of other vital things that the state requires of them but has never told them about directly. It's madness.

I think in school maths shouldn't be mandatory but a finance class should replace it which teaches basic maths including percentages etc and then teaches kids about bank accounts, loans, overdrafts etc and how to plan a monthly budget to live within your means because more people would get more out of this class than they do the maths class as it is now

How do you learn how to pay tax? Watch it come out of your wage slip?

I appreciate a lot of people are squeezed, which is a separate issue, but if they have to be taught that spending more than they earn results in difficulty then I hope they never learn how to vote :dread:

.

Holpil wrote:You can always afford to save something.

I put away at least 1/3 of my pay each month...

I mean, 1 in 4 UK families seemingly can't. Do you feel this might be because they aren't able to lock away a third of their pay-cheque like you are fortunate enough to? Perhaps if wages rose a little, they might have a bit of a buffer like you do, and they could start to fill up their savings accounts like you do.

Corazon de Leon

Far be it for me to point out the flaws of my employers' research but Blackburn, Burnley, Bolton, Grimsby, Blackpool and Wigan aren't cities to the best of my knowledge.

A 1/3 of your pay?!

You either earn too much or don't have enough outgoings. :lol:

New research by Aviva says 1 in 4 UK families have less than £95 in savings

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