Wealthify Analyses Britons' Saving Habits

  • Wealth Management
  • 01.06.2016 12:15 pm

57% of Britons are overestimating the financial return on their investments despite the fact that the majority of savers are still relying on low-interest savings accounts and ISAs, according to data from Wealthify, the online investment service.

Wealthify says that even though two thirds of Britons are now saving, the amounts saved are low, and many Britons are expecting to get by on a tight budget or struggling to afford bare essentials in later life.

Here are the facts which were gathered from a survey of 2,000 adults in the UK:

A tenth of savers have built up less than £500 and a quarter have less than £3,000, way below the recommended ‘rainy day’ pot

A third of people only use high street savings accounts

Britain’s expect their money to grow far quicker in a cash savings account than it will. When asked how much £12,000 would grow in a cash ISA over 10 years, 57% over estimated returns with 20% expecting it to grow by more than 5%. The reality is with predicted inflation levels returns are more likely to be 1%.

And despite being optimistic on returns, when asked about the financial future, nearly half of Britain’s see themselves as getting by on a tight budget or struggling to afford the bare essentials in retirement.

In reaction to the data, Richard Theo, CEO and co-founder of Wealthify says: If people are genuinely worried they will struggle to make ends meet, now is the time to change how Britain saves. As a nation we must stop hoarding ever-shrinking piles of cash and realise the true and long-term impact of low interest rates and inflation. Current poor savings habits won’t buy houses, pay for university educations or fund retirements. Accessing the best possible financial returns do, and we must start exploring the increasing number of alternatives to cash savings accounts in order to prepare for our financial futures.

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