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Guest blog: Making the UK a nation of savers

Chris Irwin, Director of Savings, Yorkshire Building Society. 

Chris Irwin, Director of SavingsThe last few years have been incredibly challenging, both for the UK and for individuals, given the impact of the global pandemic, the increase in inflation, and rapid rise in interest rates. The current climate has highlighted how fragile personal finances are across the nation.

The ability and willingness to save is critical in addressing financial resilience of individuals and the wider economy, helping households weather any emergency and fund future life goals. Recent research from Yorkshire Building Society (YBS), highlights worrying findings that debt has risen notably since the onset of the cost-of-living crisis, with the average person going a further £526 into the red as a result of rising utility, food and mortgage costs. Without savings, those families that are forced to fund day-to-day expenses by relying on personal credit will face a multitude of costs, including impact on their mental as well as financial health.

It’s clear that for a growing number of households, the last five years of economic turmoil has made saving even the smallest amount impossible. Our Saving the Nation report highlights this with the number of people unable to save on a regular basis doubling to more than one in five (22%) UK adults, from one in ten (12%) in 2019.

The findings also underline the widening of the UK’s financial wellbeing gap – the gap between non-savers and savers – with those able to save regularly there are signs of increased savings activity in light of the coronavirus pandemic, with many people seeing their savings grow under lockdown restrictions. The average Brit said they increased the amount they can save each month by almost £100, to £256 from £161 in 2019.

Over the longer-term, the key to increasing household financial resilience is the building of a regular savings habit.

You might say as an organisation who look after millions of peoples’ savings it’s in our interest to support this and you’d be right, but only because we think it’s in everyone’s interests that more people save.

As a country we must adapt and look beyond savings solely as a means of making those who are already comfortably off even better off, and think of it as a natural thing for everyone to do when they can afford it. So, in times like these, people have a much-needed emergency buffer to fall back on.
That means supporting those who are struggling the most at the moment. With the cost of living hitting people hard, it’s also crucial that everyone can access support and advice when it is most needed. The expansion of YBS’s partnership with Citizens Advice, providing advice services in many of our branches to the public, is giving real help to those in need.

As well as improving access to information and encouraging people to form a new habit,  strengthening financial capability and education is just as important. We know that learning how to effectively manage finances is a crucial life skill. That means starting with our future generations, to equip young people with the skills to manage money. YBS supports children’s financial education through its Money Minds programme aimed at young people aged five to 19, through sessions in its branches and via an online programme.

We’re committed to getting the UK saving. We want other businesses, Government and non-savers everywhere to make sure saving isn’t just a one-off, but an established good habit making people healthier, more productive and more resilient to future opportunities and challenges.

Find out more:
The full State of the Nation report can be found here

This article was first published in Society Matters magazine

 

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