Consumer: More people saving for the long-term future

Yorkshire and Humber has the lowest average rate of savings.
Yorkshire and Humber has the lowest average rate of savings.
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Three in four people are currently saving as more start to embrace the idea of saving for the long term, a report has found.

Some 74 per cent of people surveyed for Scottish Widows said they are putting money aside, up from 63 per cent when the same question was asked in 2010.

The average amount that people have in short and long term savings across the UK is also increasing, and stands at £32,407, marking a 7 per cent or £2,232 year-on-year increase.

People living in the south east of England were found to have the highest amount saved typically, at £43,229, while people in Yorkshire and the Humber had the lowest average savings at £23,834.

One fifth of people surveyed said they are saving for just the short-term, while 17 per cent said they are only saving for the long term and another 37 per cent said they were saving for both.

The report suggested that changes to Isas have helped to change people’s mind sets about long-term savings, as have pension reforms.

Meanwhile, the introduction of automatic enrolment in to workplace pensions in 2012 has sparked debate about people’s long term savings and how much they need to live on for a comfortable retirement.

But despite the increase in people saving, 26 per cent of people surveyed said they are saving nothing at the moment and 18 per cent said they have no savings at all.

David Lascelles, savings expert at Scottish Widows, said: “It has been a watershed year in the savings landscape and the study reflects to some extent the effect that landmark changes have had on people’s mind set.

“Greater flexibility on savings vehicles including Isas and pensions as well as reforms to how savings can be passed on provide more incentives to put money away for the longer term. The increase in long-term savers suggests more people understand the need to prepare for their financial future.”