People would rather drink coffee than save money
Forget economic doom and gloom-we are all so well-off it’s practically untrue. Yesterday we told you how Ernst and Young have worked out that we will all be nearly £500 nicker better off this year than last, and today comes news that most of us could put a bit away every month, but we choose not to. We’d rather spend our money on holidays, satellite telly and overpriced delicious takeaway coffee.
The survey, commissioned by Aviva (Norwich Union), found that approximately a third of UK families say they have cut their spending to the absolute bone, rising to 65% of single parent families, but that 79% of families admit there are certain cutbacks they can't or won't make. 173% of the researchers were no good at maths*. Of the two thirds of families who believe they could afford to save something extra each month, the typical "affordable amount" is £53 a month (£636 annually).
The survey found that people are prioritising "must haves", instead of thinking about saving this extra cash. These "non-negotiables" include items such as summer holidays (17%), not turning down the heating (14%), and cable / satellite TV (12%). Austerity my bottom.
But bizarrely, when asked about where they would find the extra money, families said they were most likely to cut back on food costs by stopping regular take-away meals (26%), or buying basic ranges in the supermarket (25%). They would be far less likely to give up take-away coffees (6%) or breakfast (4%) on the way to work even though they could get close to the £53 monthly amount just by cutting out a daily £2.50 chocamochaskinnylattecino.
The research shows that saving, even if we do have the money, is not top of families' priority lists. While most families admit they could put something extra aside, their savings experience tends to be ad hoc rather than as a conscious part of their regular financial planning. Only one in five (19%) families set aside a specific amount each month and one in eight families (12%) admit to using a penny jar or piggy bank. Just don’t try and pay your accountant with it.
But what do you think? Is saving a little bit worth more than a little bit of luxury? Or, if you are daft enough to be a Starbucosta addict, should we even care about whether your family can eat cool and retro Kellogg’s cereal instead of Budget flakes? Is all this talk of a recession just plain nonsense? Won’t someone please think of the children?
*The researchers meant to say 76% of the remaining 67% (which is nearly 53%). But they didn’t.