Times are tough and saving has become increasingly difficult for many people throughout the nation. Higher living costs are eating away at any sort of income and low interest rates are eating away at any sort of savings.
It might come as no surprise that almost one in three UK households have no savings at all and a further 19% have less than £1,500.
According to figures from Lloyds TSB, over the last decade household savings have only increased by 7%, marking the worst performing decade for savings in the last 60 years.
A growing number of households have struggled to keep their debts and outgoings under control since the global economic meltdown of 2007, but saving is on the agenda once again. The proportion of incomes now saved is at 7.4%, which is a vast improvement on the 2.6% in 2007.
Whilst it appears that savings are growing, insurance firm Aviva claims that households could still pocket an extra £53 a month.
Their research shows that a worrying 33% of households can’t afford to put any more aside as hand-to-mouth living becomes commonplace.
Saving figures in proportion to wages may have increased since 2007, but the cost of living has also shot up. Figures show that a staggering 65% of single parent families can’t afford to save.
Despite this, 76% of families claim that there are certain cutbacks they just can’t or won’t make. More and more families are concentrating on what they ‘must-have’ rather than thinking about saving. These ‘non-negotiable’ items include summer holidays, not turning down the heating and having cable or satellite TV.
The UK may have entered a second recession but it’s not all doom and gloom. There are a few simple ways you can start saving today, without cutting back on everyday essentials. As families aren’t prepared to cut back, they can at least shop around for cheaper deals.
Switch energy suppliers
One simple and easy way to see an instant reduction in your outgoings would be to switch to a cheaper energy supplier. By moving your financial products around every now and then you could benefit from a cheaper tariff and one that might work better for you.
Shopping around for a good deal is commonplace now with so many comparison tools widely available. You could compare energy tariffs with Money Expert’s SimplySwitch service and save up to £300 a year.
A number of households are being forced into fuel poverty as gas and electricity bills become increasingly expensive. Whilst some 14% of people might not be prepared to turn the heating off, they could try and find the cheapest available tariff.
"It's understandable that people are swayed towards using cash for more immediate and exciting things like holidays, rather than putting it into savings. But families also report that ‘unexpected costs' are one of their biggest money worries, so it's important they weigh up where their priorities lie, commented Richard Kelsall, head of savings for Aviva.
“By getting into the savings habit, families can help secure their financial futures, while building a buffer means they're less likely to turn to the credit card when unexpected bills come in," he added.
Move current accounts
It’s been discovered that people change their partners more frequently than they change their bank. Loyalty to one bank, however, might not give you the rewards you deserve. You could easily make some quick cash by switching current accounts. There are a number of high street banks and lenders currently offering competitive deals.
Halifax is one of the latest contenders to entice consumers with cash deals. The bank is offering £100 to customers who move their current account to the bank.
Making £100 has never been so easy and the offer is available until 15th July. Unlike some providers, Halifax claim they will pay the branch customers £100 on the day they start the switching process. You don’t have to hold any other products with the bank in order to be eligible for the full £100.
Research from the bank highlights that the average switcher is 41 years old, 54% of those who do switch are men and the majority of them live in London, Ilford and Halifax.
Halifax, of course, isn’t the only bank to offer such eye-catching deals. Santander is once again offering students heading to university the incentive of £50 when they open a Student Current Account. The Santander 123 current account is offering customers 3% cash back on bills paid by direct debit.
Whilst some banks may require a minimum monthly deposit, others can be opened from as little as £1.
Compare current accounts with Money Expert.
If you feel like making a complete overhaul of your financial products you could also switch your credit card to benefit from 0% interest introductory deals as well as shop around for cheaper home/car/pet insurance.
When saving, it may be worth looking around for a tax free ISA account which will give you the best returns, reviewing your pension scheme and switching mortgage providers.