People in the UK are wasting more than they save on ‘frivolous and unnecessary’ purchases raising concerns that over 15 million Brits would be unable to cope financially in the event of an emergency, according to recent reports.
Research conducted by NS&I found that Britons saved an average of £87 per month in Spring. Whereas a report by Bright Grey highlighted that over 300,000 admit to wasting £100 or more on things that they do not need.
People are saving less...
The amount that people are saving each month seems to be falling rapidly. Nearly a quarter (23pc) of NS&I’s respondents admitted to saving nothing at all each month, an increase of 6pc on the previous year.
In spite of the fact that incomes have remained stable, the average Brit was only putting away 7.08pc of their monthly wage during the quarter as opposed to 8.31pc in Spring 2011.
The report also suggests that the future of savings could be bleak. Nearly half of respondents (49pc) see no way that they will be able to set aside any more money in the coming months and a quarter feel that they are less likely to be able to make any financial provisions this quarter.
John Stout, Retail Customer Director at NS&I said:
“When times are tough it can be difficult to save but even putting away a few pounds each week will help act as a financial cushion, should you face an emergency.”
“It is worth everyone taking another look at their finances to make sure their money goes as far as possible. Why not start a log of all incomings and outgoings to help you work out a budget? This can be a useful way to keep on top of your money management.”
“Last spring (2011) nearly a third (32%) of Britons with savings goals were motivated to save for an emergency, but this fell to just 24% in winter. Perhaps as a result of this, over a third (37%) of savers now don't have enough savings to cope in an emergency.”
...but spending more
In contrast with the lacking savings, research by Bright Grey has highlighted that Britons are wasting around £17 million per year on frivolous buying. Their report stated:
“Despite the current economic climate, we are not necessarily being careful with our money. The average person says they fritter away £28.90 each month.”
They also found trends in financial wastage in gender groups and different cities. On the whole, men are more carefree with their money, frittering away an average of £30.80 compared to women’s £27.30. People in Manchester are most sensible with their monthly finances, wasting approximately £28.90 on ‘non-essential items’ in contrast with Newcastle’s £43.90.
Bright Grey suggested that the amount of money that people are ‘wasting’ could be linked to the amount the people are carrying with them. Britons normally carry an average of £27.40 on their persons everyday again this is greater with men - one in ten have between £75 and £100 in their wallets at all times. Bristolians tend to hold an average of £21.90 with them every day compared to people from Leeds who prefer to carry aroun £34.40 in their wallets.
Roger Edwards, proposition director, Bright Grey, commented:
“It is somewhat alarming that during a period when people fear for their financial future, the average person is still wasting nearly £30 a month through simply not taking care of their cash or spending it unwisely.”
“Individuals should try to ensure they are getting the most from their money particularly in a climate where every penny counts.” “For less than half of people's average financial wastage per month they can safeguard their own and their families financial futures.”