British people saved more money in 2014 than in any year during the past decade, according to figures from National Savings & Investments (NS&I).
Average monthly savings increased 9.25% between 2014 and 2013, rising from £101.03 to £113.77.
The amount of savings as a percentage of income rose from 8.04% in 2013 to 8.52% in 2014.
These are the highest average savings since records began in 2004.
The research found:
- 74% of savers were putting money away without a goal in mind:
- 49% of 24-34 year-olds were saving money to cover future housing costs
- 41% of 16-24 year-olds said the same.
- 26% were saving for a specific item or purpose:
- 42% were saving for a holiday or another special occasion
- 35% were looking to cover costs relating to housing.
Julian Hynd, retail director at NS&I, described the results as “encouraging” but hoped that people have enough savings in event of an emergency.
Although NS&I figures suggest an improving savings environment, a separate survey by Santander has suggested that many people could be saving more efficiently.
The survey of more than 2,000 savers found that 21% have a taxable savings account but aren’t taking advantage of tax-free ISAs.
Many people misunderstand the potential benefits of having an ISA, with 24% unaware that they are tax-free and 26% not knowing about the £15,000 maximum investment amount which came into effect in 2014.
Personal finance expert Jasmine Birtles said:
“I really want people to understand the benefits of ISAs so that they can make the most of their money. I think that people are missing out on the ISA opportunity because they don’t understand what’s being offered, just like we saw in the social experiment. As the end of the tax year approaches, now is a great time to make the most of this tax-saving scheme before the deadline on 5 April.”