- 66% of people say the rising cost of living has had an impact on their ability to save money
- Over a quarter (30%) are not saving any of their income on a monthly basis
- Findings highlight the need for banks to help address the savings challenges facing adults and fill the gap in advice available to them
The rising cost of living is having a detrimental impact on UK savings, according to a new report by Accenture.
The survey of over 2,000 UK adults found that two-thirds (66%) said the rising cost of living has impacted their ability to save money.
The findings highlight the challenges when it comes to saving and the gap in advice available for those who want to save. Over 1 in 4 (30%) adults say they don’t save any money at all on a monthly basis. 18–24-year-olds were the least likely to save any proportion of their income, with less than half doing so (43%).
The survey also found that though over a quarter had been able to save more since the start of the pandemic in March 2020 (27%), a higher proportion said they were able to save the same amount (30%).
When asked about their financial confidence, the cost of goods was highlighted as the most important factor, with over two-thirds (68%) saying this impacts their financial confidence. House prices (44%) and low interest rates (53%) were also cited as factors that impact their confidence.
Rent prices were particularly important to younger people (18-24s). Over half (53%) said rent impacts their confidence in their financial situation, compared to 30% across all age groups.
Young people were also the least optimistic overall – just one-third (33%) of 18-24s said they are confident in their future finances. Overall, half UK adults felt confident (50%).
Laura O’Sullivan, Banking Strategy and Consulting Lead, Accenture UK and Ireland, said: “UK adults are faced with a uniquely challenging environment as we enter 2022, with the rising cost of living set to get worse, not better. These findings illustrate that although one in four have been able to save more since the pandemic began, an equal number are saving nothing at all each month.
“Regardless of their savings habits, the cost-of-living crisis will make it harder for people of all ages to save money, with young people feeling the impact most acutely. The impetus is now on the financial services sector to help build financial confidence and develop products and habits to empower the next generation of savers.”
Furthermore, less than half (47%) of UK adults who have a current account felt their savings and investment needs are being met by their current account provider, and even fewer (41%) felt their current account provider was offering them the financial advice they need. Despite this, less than a quarter (23%) are likely to switch bank providers for better financial advice.
When asked about their most trusted sources of financial advice, banks fell behind financial advice websites like Money Saving Expert (72%) and friends and family (69%), with 59% of all respondents saying they would trust advice from their bank. Social media influencers were the least trusted (5%), although were more trusted by 18-24 (8%) and 25-34 year-olds (9%).
O’Sullivan continued: “The uncertainty of the last two years has emphasised the importance of savings. As the market for financial advice in the UK has become increasingly crowded, a gap for trusted sources is being filled by reputable websites and friends and family. Banks now have an opportunity to engage with their customers in new ways to build financial confidence and savings habits, which should foster brand loyalty and better equip customers in challenging times.”
Of the factors that were important in deciding which products to invest in, ease of access was deemed the highest priority (83%) – with levels of returns also a crucial factor (81%).
When asked about the type of investment options they would be most interested in, people were most interested in those offering higher returns (26%) and stocks and shares ISAs (26%). 1 in 10 (10%) were interested in cryptocurrency products, however this proportion doubled for 18–24-year-olds (19%).
Interest in cryptocurrency products was higher among younger people (18 – 24) than other age groups. Almost one in five (19%) said they would be interested, compared to 10% of all respondents and just 3% of those aged 55 and over.