This figure rises to a staggering 65% of single parent families. These findings are revealed in Aviva’s latest Family Finances Report released today.
Of the two thirds of families (67%) who believe they could afford to save something extra each month, the typical ‘affordable amount’ is £53 a month (£636 annually).
However, there’s strong evidence that many families will prioritise spending on certain ‘must haves’, rather than thinking about saving. Three quarters (76%) of families admit there are things they would refuse to give up, even if doing so meant they could save more.
These ‘non-negotiables’ include items such as summer holidays (17%), not turning down the heating (14%), and cable / satellite TV (12%).
Encouragingly, life insurance and payments into pensions were the third most popular things people wouldn’t cut out.
When looking at what people would be prepared to sacrifice in order to boost their savings, families were more likely to cut back on food costs by stopping regular take-away meals (26%), or buying basic ranges in the supermarket (25%).
Interestingly, people are less likely to give up ‘little and often’ luxuries such as take-away coffees (6%) and breakfast (4%) on the way to work. But a quick calculation shows cutting out a £1.99 coffee every working day would save £477.60 over a year.
However, the research also shows that saving is not top of families’ priority lists. While most families admit they could put something extra aside, their savings experience tends to be more ‘as and when’ rather than a conscious part of their regular financial planning.
Only one in five (19%) families set aside a specific amount each month. It is far more common for families to save sporadically – for example following a windfall – or by putting away any spare cash at the end of the month. One in eight families (12%) admit to using a penny jar or piggy bank.
Notably, the families who save automatically by Direct Debit say they don’t even notice the money going out of their accounts.
Richard Kelsall, head of savings for Aviva, says: “It’s clear from our research that families are making tough decisions about their spending, which unfortunately means saving can become less of a priority. However, our research shows that most families are trying to save and it’s encouraging that two thirds say they could afford to put more money aside each month.
“It’s understandable that people are swayed towards using cash for more immediate and exciting things like holidays, rather than putting it into savings. But families also report that ‘unexpected costs’ are one of their biggest money worries, so it’s important they weigh up where their priorities lie. By getting into the savings habit, families can help secure their financial futures, while building a buffer means they’re less likely to turn to the credit card when unexpected bills come in.”
