IFA Promotion’s annual study*, published today, highlights the growing reality gap between
The perception
Seven out of ten (71%)
The reality
Two thirds (63%) of those who “can’t save more” admit spending their spare cash on expensive and unnecessary luxuries, while alarmingly three out of ten women (28%) get into debt to fund costly purchases.
54% of adults say they would not “reduce unnecessary spending in order to save more.” Even if their income rose by a quarter, they would rather spend this extra cash on extra holidays (60%) or home improvement (58%) than divert any of it to their pension pots or long-term savings (36%) or paying off debts (41%).
Two thirds of adults view themselves as savers, yet recent figures show that we borrow 83 pence for every pound saved**, revealing a lack of joined-up thinking.
David Elms, Chief Executive of IFA Promotion, says, “Long-term saving just doesn’t seem to be registering as a priority in the British psyche, but it’s never been more critical. The only way the
Four out of ten people who concede they could save more (6% more than last year) are not doing so because they believe they are saving enough, despite high-profile reports to the contrary. Other reasons given by this group for not saving more are:
17% say spending it is more fun; particularly among women, where the number of self-confessed spendthrifts has risen from 11% to 19% since last year.
15% plan to start saving in the next 12 months, while just 13% say they are paying off debts first, and only one in ten are put off by “low returns.”
Who will save us?
If faced with a financial crisis, most people would turn to a ‘white knight’ to help them, rather than take responsibility themselves. More than a fifth (22%) would turn to their family for help, 21% would go cap in hand to the bank. Only 19% think they would have adequate personal savings to cope.
Spend, spend, spend…
IFA Promotion also investigated how people are funding their luxury lifestyles:
Women flash their plastic for big ticket purchases 50% more than last year; 28% now take on debt to fund their spending sprees, compared to 22% of men.
The number of people who use regular income or save specifically for luxury purchases has declined since last year; amongst women from 36% to just 22%.
IFA Promotion today launches its Get Saving! awareness campaign to encourage people to start budgeting better, and be more realistic about their financial future. People can find guidance, budgeting tools and information at www.unbiased.co.uk/getsaving or by calling 0800 085 3250 for a copy of IFA Promotion’s ‘Join the Saving Revolution’ guide.
Some rays of hope for saving
There are some positive signs that the tide could start to turn among younger people. A third (34%) of under-35s feel they are able to increase their savings compared with just a quarter of 55-64 year olds. The amount of under-25s planning to start saving this year has also shot up by well over a third to 27%, and two thirds of this age group say they would be willing to reduce unnecessary spending in order to save more for their retirement.
Elms concludes, “Perhaps the good intentions of the younger generation will result in rosier looking retirements in years to come, but no-one can afford to be complacent. There will soon be too many pensioners for the state to support in any meaningful sense, so people need to take control of their financial future as soon as they can.”
Call 0800 085 3250 or visit www.unbiased.co.uk/getsaving for IFA Promotion’s Join the Saving Revolution guide, looking at why we need to save, and how you can budget to save more, and options for where to put any extra
-ends-
* The Get Saving! 2005 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 2004. With detailed queries on the report, call
** Savings Brake research conducted October 2004 by RAKM for IFA Promotion.
SOME SIMPLE THRIFT TIPS TO BOOST YOUR SAVING POTENTIAL
1) Buying a coffee on the way to work each morning can cost you over £360 a year – a wake up call for anyone.
2) A second or third family holiday each year can really rack up. And a retirement without any money for holidays would be more of a wash-out.
3) Trying to hit the lottery jackpots every week can cost you over £100 a year. And how many friends can you name who have won more than that?
4) Gym membership can cost £400-£1000 per year. Do you really use it? A run in the park is free.
5) Buying a sandwich from your local shop is more than double the cost of making your own – and you can use more filling!
6) A satellite TV subscription can cost £500 a year. What did you do before you had it?
7) We all like building up our music collections, but at do you really need to spend more
9) Going for a post-work glass of wine or beer just two nights a week can cost you over £260 a year.
10) With plastic in your pocket it’s hard to resist those impulse buys. But do you really need another designer top or new mobile phone?
11) Most of us either give or throw items away that we have replaced. Why not sell them on Ebay?
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
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 over 10,000 firms of independent financial advisers across the
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
· Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who is not.
2. Independent Financial
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Abbey |
National Savings & Investments |
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AXA Life |
New Star Investment Funds |
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BUPA Health Services |
Old Mutual Asset Managers ( |
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Canada Life Ltd |
Prudential |
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The Children’s Mutual |
Scottish Equitable Plc |
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Clerical Medical Investment |
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DWS Investments Ltd |
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Friends Provident |
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GE Life |
Selestia Investments Ltd |
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GMAC Residential Funding |
Skandia UK Group |
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INVESCO Fund Managers Ltd |
Southern Pacific Mortgage Limited |
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Legal & General |
Standard Life Assurance Company |
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London Mortgage Company |
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Mortgage Express |
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