Saving trumps spending for 70% of people
Saving money or putting it away to spend later continues to be a strong habit among consumers, according to new research from Leeds Building Society.
Its quarterly savings barometer survey* asked people what they would do if they found an unexpected £20 note in their pocket.
The research found that 72% of respondents would save their unforeseen £20 or put it away to spend later, while a generous 15% of people would donate their find to charity or give it to a friend or relative.
Matt Bartle, Leeds Building Society’s Director of Products, said: “At a time when instant gratification appears to drive so much behaviour, it’s good to see so many people carefully considering their options should they find money they didn’t know they had.
“With all the economic and political uncertainty at the moment, many people are weighing up whether now is the right time to be spending their money. Saving is a good habit and putting away money as and when you can, whether that’s £20 or £200, is a good way to build a nest egg for when you may need it.
“We work hard to understand savers and continue to develop products that help them reach their financial goals. Our experience, and insight from our members, led us to launch our Smart Saver product currently paying up to 1.1%.
“It complements our existing easy access accounts and rewards savers who want to build a nest egg, while ensuring they aren’t penalised should they want to spend their money at a later date.”
Smart Saver offers five penalty-free withdrawals per year and has a minimum investment of £5,000.
Just 12% of respondents said they would spend a surprise £20 note straight away, on a treat either for themselves or someone else, buy a necessity or take a punt on a bet or a lottery ticket.
Rachel Springall, Finance Expert at Moneyfacts, said: “Saving little and often is the key to building a nest egg for the future and ideally consumers need to put aside enough cash to cover their essential outgoings for at least six months.
“Right now, savers may well be concerned about what lies ahead and this can stir a change in mindset to save any surplus cash for emergencies. It’s good to see from this survey that savers would be sensible if they were to come into some money – even if it was only a small amount. An easy access account is a great choice for anyone looking to save their spare cash as it offers flexibility if they do need their money returned without giving notice.
“Savers desire to have flexibility with their cash remains firm, as the Bank of England estimated £1.6bn flowed into instant accounts during May, while separate figures from UK Finance revealed deposits into accounts that require a tie in fell by 3% year-on-year.”
Notes to Editors
*Leeds Building Society conducted surveys with its online member panel, TalkingPoint, in January, April and July 2019. A total of 1,290 responses were collected.
Leeds Building Society was named Best Building Society Savings Provider in the Moneyfacts Awards for 2018, having also won this title in 2016 and 2017. It was also awarded a Gold Ribbon for customer experience from Fairer Finance for its savings accounts.
Leeds Building Society operates throughout the UK and in Gibraltar and has assets of £19.4bn at 31 December 2018 (£18.5bn at 31 December 2017). The Society’s head office has been based in the centre of Leeds since 1886.
- Tiered interest rate 0.9% on balances over £5,000, 1% on balances over £25,000 and 1.1% on balances from £50,000 to £250,000
- Minimum investment £5,000
- Maximum investment is £250,000
- Interest is calculated and paid on 30 September commencing on 30 September 2019
- Interest can be credited to the account, or transferred to another internally or externally
- Five penalty free withdrawals permitted every year without notice or loss of interest
- Can be opened in branch, online or by post