Young people have a hard time when it comes to money. We’re portrayed in the media as spending for too much and not making enough sacrifices to meet our goals. However, new research has shown young people have the most ambitious savings goals.
The research comes from HSBC, who have looked at our savings habits to spot some trends and patterns.
I’ve been lucky enough to take a look at HSBC’s latest research and have decided to share the key findings with you.
In this post I’ll cover:
- How ambitious are our savings goals?
- How are we trying to reach them?
- What do the experts think?
How ambitious are our savings goals?
Overall, only just over a third (36%) of UK adults have set a savings target. Meanwhile, just 21% are optimistic they will hit their saving goals – even if they’ve set them!
The most common reasons for not achieving a target are: an unexpected life event (40%); dipping into savings to make up for overspending (29%); and setting a goal that was too high (10%).
However, the news is better for 25-34 year-olds. Over half (55%) said they are saving towards a specific target.
This is positive, as it is very hard to commit to saving if you have no goal in mind. Having a clear goal will help keep you motivated and focused, even when it gets difficult.
Despite this, younger adults are more likely than their older counterparts to have to dip into their savings when they haven’t planned to.
In total, 39% of 25-34 year-olds said they have had to dip into their savings pot due to overspending.
It’s not just young people that are better at setting targets. The YouGov survey also found women (40%) are more likely than men (32%) to have set a savings goal.
How are we trying to reach these savings goals?
There are a number of ways people are trying to hit their savings goals.
Putting money aside
The first step is to have some money left over after rent, bills and essential spending each month. And, once again, younger people are leading the way in this area.
Almost two thirds (62%) of 18-34 year-olds say they are regularly saving, compared to just 55% of those aged 45-54.
The data also suggested a gender divide in savings attitudes. Men (57%) are more likely than women (53%) to say they’re actively saving in general.
How are people saving?
There are a number of different ways people are saving to try and reach their goals.
Overall, cash savings are by far the most popular way to plan for the future with (53%) using that as a way to put money aside.
In the current high inflation environment, there are worries about keeping all of your savings in cash. There is still a place for cash – for your emergency fund and for any large purchases you may need to make in the next year or two.
However, there is a risk if you rely too much on cash, inflation will essentially eat away at your hard earned savings and you’ll end up with less in real terms over time.
After cash, the most popular ways to try and hit savings goals are: pensions (31%), and shares at 16%.
When it comes to cash, there is only a small difference between men (54%) and women (52%).
But, when it comes to other kinds of investments, the data suggests there is a much wider divide.
More men (35%) than women (26%) say they’re saving money into a pension.
Additionally, they’re also nearly twice as likely to be investing in shares (21%), (12%) and investment funds (12%), (6%) – while five times as many men than women say they’ve bought into cryptocurrencies (6%), (1%).
What the experts think?
Lisa Gallagher, a senior savings product manager at HSBC, says the survey highlights one of the key changes you can make in how you manage your money that can help you create a clear path forward to where you want to be financially.
“This new research reminds us all that setting a target, regardless of our age or where we live, is a key step towards achieving a financial goal and it’s great to see younger people and women leading the way.”
“HSBC UK is to proud help customers improve their financial health through our Financial Fitness Hub and by providing a range of Savings and Investment products that support both short term and long term savings goals.”
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