The nation’s savings goals revealed


By Beehive Money

Have you ever wondered about what other people think about saving money? Or whether it’s worth it? Or even, what most people are actually saving for? Delving into the nation’s saving secrets could actually help motivate you to save better, or to start saving altogether.

Research by The Nottingham in 2019 into YouGov profiles found some interesting facts and figures on UK saving habits:
  • 16% of us don’t use savings accounts
  • 46% prefer to have more than one bank account
  • Most savers are looking to reach long-term goals and future plans.

Why have savings?

Saving up doesn’t have to be scary or stressful – it can actually be pretty simple, and it’s also sensible to plan for the future, as well as the now. It’s also a good idea to have some money set aside for unforeseen problems, like home maintenance, rainy day spending, and of course, a holiday or two. Our research showed that while many people do have savings, 33% get a bit confused by finances, so we’re here to help.

We also found out that almost a fifth (18%) of people feel worse off than they were the previous year, though thankfully, 68% felt there’d been no change. Whether your financial situation changes over time or stays the same, having savings can be a useful buffer for the unexpected, as well as long-term goals.

What do people save for?

The research unveiled some interesting points – the majority of people (28%) are looking to save money for a holiday. Next comes that all-important emergency fund (19%), with a large chunk making it their savings priority. It makes sense, as unexpected costs can crop up at any time, whether due to illness, lack of work or household maintenance.

Retirement (16%) and moving or buying a house (14%) came third and fourth. While everyone’s spending habits are different, it seems most people prioritise short-term goals first with smaller saving pots, then move on to building bigger funds for future milestones.

Also in the top five was buying a new car (11%). It’s another expense that many can’t afford outright without a savings fund.

What type of savings accounts do people use?

Our research turned up some interesting results.
  • 50% have an easy access savings account, perfect for dipping in and out of, and using for holidays, Christmas spending, or a financial buffer.
  • 33% have a Cash ISA, which offers tax-free savings. On that note, the Lifetime ISA (LISA) is a great option for those looking to save up for a first home or retirement, as you can earn a Government bonus of 25% on your savings (though there are a few strings attached).
  • 19% have premium bond investments. Every £1 saved in this type of account is a chance to enter a monthly draw, where you can win tax-free cash prizes , instead of being paid interest on your savings. 

How does a LISA work?

These can be used for first-time buyers or those building a retirement nest egg. In a nutshell:
  • You can open the account anytime if you’re aged 18-39.
  • The Government pays a 25% bonus on your savings, up to £1,000 per tax year.
  • The bonus is paid until you turn 50. But, you’ll still earn interest after this.
  • You can withdraw the money from age 60 to help fund your retirement or after 12 months for a first home.
  • There’s a 25% Government charge on your withdrawal if you take out the money for pretty much any other reason – it’s not a good idea to do this if you can avoid it, as you might get back less than you paid in.
  • You can use the LISA alongside other pension pots, like your workplace pension and state pension.

How does a Stocks and Shares ISA work?

Although we don’t yet offer this at Beehive, it can be a good option for those who want to save long-term.
  • You can open the account anytime if you’re aged 18 or over.
  • Any money you pay can be locked away for at least five years.
  • A Stocks and Shares ISA covers unit trusts, open-ended investment companies, investment trusts and both Government and corporate bonds.
  • The value of your savings can go up or down as the market changes.
  • We suggest a chat with a financial adviser if you’re interested. If you’re already a member of Beehive Money or The Nottingham, we can set up a free initial meeting with our partner, Wren Sterling, for specialist advice.

How does a Cash ISA work?

It’s simply a way to save up money without having to pay income or capital gains tax (and it won’t count towards your Personal Savings Allowance, either). Each tax year, you can put away a maximum £20,000 – known as an ISA allowance – which can be spread across all your ISA accounts. 

Why choose a Cash ISA?

These are a good bet if you’d like to earn tax-free interest on your savings.
  • You can open the account anytime if you’re aged 18 or over.
  • Some offer a fixed rate for a period, so you can better gauge what your savings will earn.
  • Some types of Cash ISA are easy access (you can withdraw at any time), but others might have limits in place.

What’s my next step?

If you’d like to open a savings account but feel in the dark about what’s on offer, it can help to chat to a financial adviser for specific advice or our Customer Advocates can let you know about the different features of the Beehive Money accounts. You can also check out our range of savings accounts to see which suit your savings goals.

The Nottingham's analysis of responses of 173,666 UK adults from YouGov Profiles, showing statements agreed with about Finance, Household & Economics and Consumer & Lifestyle. GB Profiles survey completed on 17/02/2019.