You are here: Home > Media > Press releases > Brits would sooner blow pay rise on luxuries than clear debt or get saving

• Print Page

Brits would sooner blow pay rise on luxuries than clear debt or get saving

Holidays and home improvements top the list, while financial priorities lag behind

18 July 2006

Over 30 million UK adults (70% of the UK adult population) claim they are not in a position to increase the amount they save each month. And it seems that this is down to poor budgeting priorities rather than affordability. Faced with the prospect of a 25% increase in household income, UK adults would much rather spend the additional money on life’s frivolities than save for their financial futures. This is according to research* from IFA Promotion, the organisation promoting the benefits of independent financial advice.

The most popular use for an increased income would be to spend some of it on a holiday, with nearly two thirds of UK adults (63%) choosing to do so. Over half the population (54%) would use the money to fund home improvements, and 46% would put cash towards updating their wardrobe. In contrast, only two in five adults (40%) would pay anything off their debts and a similar proportion (44%) would channel money into their retirement savings. [Please refer to Figure 1 and 2 for full findings, split by age, gender and region].

David Elms, Chief Executive of IFA Promotion comments: “Despite well-documented and countless warnings that as a nation, we are not saving enough, it seems that people are yet to adopt a sensible savings mantra. And whilst the research is based on a hypothetical situation, it serves to highlight a very real problem in that people are too reluctant to forgo their spending to secure a comfortable financial future. People need to place clearing debt and saving much closer to the top of their list of financial priorities.”

This is however an improvement on last year’s figures, when only just over a third (36%) said they would commit any additional income to long-term saving. Over 12 million UK adults now classify themselves as a ‘saver’ (with no borrowing), compared to 11 million last year.

Elms concluded: “This is a positive development, but it is still a far smaller proportion of the UK population that are choosing to focus on saving for the future. This situation needs to be rectified, and taking independent financial advice on ways to organise your finances is a good place to start.”

-ends-

For expert comment or case studies from over 200 media-friendly IFAs, journalists should call IFA Promotion’s Media Services hotline on 020 7294 3682 or search online in ‘Media Services’ at www.unbiased.co.uk

* The Get Saving! 2006 report was produced for IFA Promotion by RAKM, and is partly based on an analysis of Inland Revenue, ONS, DWP Family Resource survey, Bank of England and ABI along with a specially-commissioned face-to-face consumer survey of 2,000 UK adults (16+), conducted by BMRB during October 2005.  With detailed queries on the report, call Paul Hersey at RAKM on 01737 216 940.  To view and download previous Get Saving! reports visit www.unbiased.co.uk/getsaving 

Figure 1: If your household income increased by a quarter how would you spend the extra money? By gender and age

Figure 2: If your household income increased by a quarter how would you spend the extra money? By region

 

 

For further information please contact:

David Elms                                                Chloe Mann/Holly Godden

Chief Executive                                          Lansons Communications

IFA Promotion                                            020 7294 3681/3674

020 7833 3131

1.  Independent Financial Adviser Promotion

IFA Promotion was established in 1989 to promote the value and accessibility of independent financial advice to the public.  It represents around 9,000 firms of independent financial advisers across the UK and is sponsored by 31 leading financial institutions. In the past 12 months, over 530,000 consumers and businesses used IFA Promotion to find local independent financial advice.

IFA Promotion believes Independent financial advice should be:

         Affordable.  The option to take independent financial advice should be available, by right, to all - not just the wealthiest in society.

         Convenient.  IFAs should be available in the location of the consumer’s choice, wherever they live in the UK.

         Transparent.  It must be clearly transparent to consumers who is able to offer independent financial advice and who is not.

2.      Independent Financial Adviser Promotion’s sponsors

Aberdeen Asset Management	Mortgage Express
Abbey	National Savings & Investments
AXA Life	NatWest Business Banking
Bright Grey	New Star Investment Funds
BUPA Health Services	Norwich Union Life
Canada Life Ltd	Prudential
The Children’s Mutual	Scottish Equitable Plc
Clerical Medical Investment	Scottish Life
Defaqto	Scottish Life International
Friends Provident	Scottish Widows Plc
GE Life	Skandia UK Group
GMAC Residential Funding	Standard Life Assurance Company
INVESCO Fund Managers Ltd	Unum Provident
Legal & General	Webline Limited
London Mortgage Company	Zurich Intermediary Group
Lincoln Financial Group