This summer has seen the resurgence of Brits as winners when it comes to sport, but how good are we when it comes to winning in the old savings game and which UK regions are the best?
Zopa collaborated with the CEBR to examine the state of the savings in the UK. We found that where you live may play a big part in how much you save as a household. The median UK household held £3500 worth of savings and investments in 2012, which in total came to £730 billion.
So which area had the best savers and which had the worst? Below is a table that breaks down the various regional areas of the UK.
As you can see there is significant gap of £4,000 between the top three areas and the lowest area, Wales, which held the fewest savings in 2012, at just £1,500. By contrast, median households in the East Midlands, Greater London and the North West had the highest average savings with £5,500 saved away. Despite these regional disparities, there is not a straightforward North-South divide in savings. The report shows that savers across the majority of the UK’s most populated areas are actually very good savers compared to other regions.
Although Britons are saving for their future each year, how do we compare against other countries? Are we saving gold medallists or do we even make the final starting line?
Well, as a nation we actually only save 7.1% of our disposable income. This is a lot less compared to our European neighbours and half the amount compared to the French with 15% and Germans, which come out on top with over 16% of their disposable income. The proportion of income saved by UK households is closer to that found in the US and Canada than to the European Union average of 10.9%. Households in the US saved just 4.1% of their income in 2012, while households in Canada managed a little more at 5.4%.
This may be to do with economic issues and the wider financial climate but it may also be to do with how we speak and the affect that language has on our attitude to saving for our future. Keith Chen, an economist gave a Ted Talk earlier this year called – Could your language affect your ability to save money? It explores this theory and found that many languages that come from Latin, Chinese or Germanic origins do not change their structure when talking about verbs and time. Whereas English changes the verb to fit the timeframe. For example, “I save yesterday, I save today and I save tomorrow” compared to “I saved yesterday, I saved today and I will save tomorrow” in English. In languages other than English, the verb “to save” is a constant part of life rather than an option.
What is clear is that location does seem to play an important factor in how much we save, but looking at the bigger picture we as a nation could and should be saving more. The most common savings are still bank and building society savings accounts, ISAs, stock and shares, premium bonds and trust funds.
With Zopa returns currently at an inflation beating 4.6%, lending money to other people really is fast becoming the winning way to get a great return on your savings. We have over 42,000 active savers lending between £10 and £1 million to sensible people looking for low cost loans. Peer to peer lending is one of the few alternatives to ensure you beat inflation even after tax. To make sure that your savings stay positive and not negative, why not set up a Zopa account online, it takes a few minutes and you can start lending with just £10. With such low rates from the banks and building societies, now is a perfect time to think about becoming a saver with Zopa and lend your money to grow your savings under the protection of our Safeguard fund.
If you are keen to learn more about P2P lending, take at our YouTube page and this video below on why our savers lend through Zopa.