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The Actuary The magazine of the Institute & Faculty of Actuaries

Why we save

Reaching us last month was Abbey National’s Savings Insight which measures the changing motives for our savings behaviour by region:

  • Respondents in the most recent British Household Panel Survey are less likely than last year to say that they are saving for short-term reasons, such as holidays and special events. There has been a 14% decline in saving for holidays and a 23% decline in saving for special events from 2002.
  • In contrast there is a much larger increase in people saying they are saving for long-term reasons such as old age, buying a property, and children. There has been a 53% increase in earmarking saving for old age and children and an 8% increase in saving for a house purchase since 2002.
  • Women are still more likely to ‘ring-fence’ their savings than men and in particular for special events, the same as last year’s survey findings.
  • Merseysiders once again are the people most likely to save for short–term goals such as holidays.
  • London stands out as the region where more people give long-term reasons (such as old age and house purchase) for saving.

Chief economist for Abbey National, Barry Naisbitt, said: ‘There are some important changes in attitudes to saving compared with last year’s survey. Given the government’s focus on making savings products easier to understand and concern about the “pension gap”, this attitudinal shift is very positive. However, with only two-fifths of adults in the UK regularly saving, there is still a major challenge ahead to encourage more people to put money aside.’