Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Reverse REPO Market Brewing Financial Crisis Black Swan Danger - 29th Jul 21
Next Time You See "4 Times as Many Stock Market Bulls as There Are Bears," Remember This - 29th Jul 21
USDX: More Sideways Trading Ahead? - 29th Jul 21
WEALTH INEQUALITY WASN'T BY HAPPENSTANCE! - 29th Jul 21
Waiting On Silver - 29th Jul 21
Showdown: Paper vs. Physical Markets - 29th Jul 21
New set of Priorities needed for Unstoppable Global Warming - 29th Jul 21
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

ISA's and Saving Accounts - Can't Save or Won't Save

Personal_Finance / Savings Accounts Apr 09, 2007 - 04:16 PM GMT

By: Submissions

Personal_Finance

Rachel Le Brocq writes : “I can't afford to” is a phrase often used when people are asked why they don't save; but why do some people save more and others save less, even though they are in similar situations?  A report, published today by the Building Societies Association, shows that one of the biggest barriers to saving isn't how much money you have, but the way you think about it.

The Individual's Saving Decision¹ reveals that almost a third (30%) of those people who do not save at the moment say absolutely nothing could persuade them to save.  Whilst some of these people really will not be able to save, many others can, but have chosen not to. 


By thinking about saving in a different way, people can motivate themselves to kick the consumption habit and get into the savings habit.  Rather than looking at the immediate sacrifices of saving, people need to think longer-term and consider the peace of mind and flexibility saving will bring.  [See end of release for more tips on saving.]

In the past people have been told that saving is something you should do.  But our research shows that simply telling people to save will not be effective.  Instead a change in psychology is required so that people want to save.

Interviews with savers showed that saving does not mean that your lifestyle has to change.  In fact, when questioned further, the majority of non-savers also acknowledged that they could afford to save and none would miss £30-£50 taken from their account straight after payday. 

Commenting on the report, Adrian Coles, Director-General of the BSA said:

“ This report chooses not to simply accept the instinctive response “I can't afford to save” and looks deeper into how and why people come to the decision to save or not to save.  What is clear is that saving is a very individual decision and whilst some people in one situation view saving as a rewarding priority, others in the same situation see it as little more than a costly sacrifice; for them the act of saving is a cost that outweighs the benefits.

“The way many people currently think about saving needs to be challenged.  We need a change in psychology.  Instead of thinking of what you could spend the money on now, you need to think about how reassuring it would be to cushion against future expenditure, be it planned or unforeseen.  Putting aside even a little each month can really make difference.

“The best long-term solution is educating people so that they want to save by making financial capability a compulsory part of the school curriculum and embarking on a public awareness campaign to show the potential hazards of not saving.”

The report makes several policy recommendations to try to encourage people to think about their savings in a different way.

o  Financial capability should be made a compulsory part of the school curriculum to instil a long-term financial outlook in all children.  This should be linked to the Child Trust Fund to develop financial capability at an early and impressionable age.

o  A public awareness campaign is likely to be required to make adults stop and re-examine their current saving behaviour – similar in nature to the stop smoking campaigns using stark imagery of a harsh future.

THE EASY WAY TO START SAVING
Some tips from the BSA

o Take stock of your finances; sit down and consider the level of your savings.  What will your life will be like in five years time and how would a savings nest egg help you cope?

o What could you give up?  Rather than buying a coffee every morning save the money instead; you could have around £450³ in a year's time

o Think about putting part of your next pay rise straight into a savings account – that way you won't even miss it.   You could set up a standing order so the money comes out immediately every payday

o Set a goal to save for; imagine the security a lump sum could provide

o Pass on the habit; get your kids into saving at an early age, encouraging friends and family to save for them rather than buying birthday and Christmas presents

o Don't be afraid to ask questions; your building society will be able to help if you don't understand any savings products

The Individual's Saving Decision

By Rachel Le Brocq

Notes

  1. The Individual's Saving Decision is available from the BSA website here       http://www.bsa.org.uk/publications/industrypublications/savings_report.htm
  2. Research Methodology - The research was carried out by GfK NOP Financial Research.  Ten one hour-long in-depth discussions were held with individuals by telephone. Two workshops were also held to generate a discussion about saving and product design.  The telephone interviews and workshops were held over two weeks commencing 25 September 2006.  Following the results of the interviews and workshops, three questions were submitted to the GfK NOP Random Location Omnibus.  985 people participated in the survey between the 12 and 17 October 2006. Respondents were adults aged 15+ and were from all socioeconomic groups. The answers were weighted to reflect the actual proportions in the UK population. 

  3. This assumes the cost of the coffee is £1.80 and is bought every working day for 48 weeks, saved at 5%
  4. The Building Societies Association (BSA) represents all 60 building societies in the United Kingdom. Building societies have total assets in excess of £305 billion and hold residential mortgages of over £200 billion, approximately 18% of the total outstanding in the UK. Societies hold over £190 billion of retail deposits, accounting for about 19% of all such deposits in the UK. Building societies also account for over 37% of all cash ISA balances. Building societies employ almost 50,000 full and part-time staff and operate through around 2,150 branches.
  5. Photographs of Adrian Coles are available from the BSA press office, or from the Association's website at www.bsa.org.uk

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in