The changing face of savings: 10 years of NS&I’s Quarterly Savings Survey

NS&I’s latest Quarterly Savings Survey shows how Britain’s savings behaviour has changed over the last decade. Britons are now saving 7.76% of their incomes each month, (£98).

  • Britons are now saving £98 a month. This compares to £85 from five years ago and £82 a decade ago.
  • There have been significant changes in the way people manage their money. 74% now manage their money via the internet compared to only 29% a decade ago
  • However, over the next five years, 68% expect to manage their finances via the internet on a PC, 20% by tablets and 19% by smartphone apps as their usage increases.

NS&I’s latest Quarterly Savings Survey shows how Britain’s savings behaviour has changed over the last decade. Britons are now saving 7.76% of their incomes each month, (£98). Five years ago, Britons were saving 6.42% of their income each month (£85), while a decade ago, they were saving more of their income each month, but less in monetary terms 6.70% (£82). While the current savings outlook is more encouraging than it was a decade ago, savings levels have yet to return to the peak of 8.31% reached in Spring 2011 and the monetary figure has yet to exceed the £104 recorded in Winter 2012.

Over the last 10 years the way people manage their finances has changed. Three quarters (75%) of Britons managed their finances in person, by visiting a bank or building society branch a decade ago. Today, this figure has dropped to 54% as online channels for money management, such as the internet, or via apps on tablets or smartphones have seen dramatic growth. In fact, 72% who used to manage their finances in branch, now use the internet to do so.

The shift to online banking, seems to stem from people’s views that their lives are more hectic than ever before. The survey shows that nearly two thirds of Britons (65%) said that managing their finances via the internet (either on PCs, tablets or smartphones) saves them time, while over a quarter (28%) said they felt more in control of their finances by managing them online instead of in branch. A fifth (20%) also said that by managing their money directly (online, by phone or using apps) allowed them to be more organised and keep all of their financial documents in one place.

Changes in the method used to manage finances

Method 10 years ago Now In five years time
On the internet 29% 74% 68%
Visiting bank/building society in branch 75% 54% 35%
Phone 20% 17% 11%
Via bank/building society smartphone apps n/a 14% 19%
On a tablet device n/a 9% 20%
Post 13% 9% 5%

Julian Hynd, Director of Retail at NS&I, said:

“The way customers use and access the internet is changing, and in turn, the way they manage their money is changing. Over the last ten years we saw a switch from customers banking at branches to going online. Over the next decade, we will see smartphone and tablets emerge as a key means for money management as customers look to take more control of their finances while on the move or at a time that is convenient to them.”

People feel more worried about saving than they did 10 years ago

28% of Britons said that they now feel more worried about saving money than they did 10 years ago, while just over a third (35%) feel the same way now about saving money as they did a decade ago. Only 14% have felt more confident about saving over the course of the decade, but just 5% state that they have started to feel more confident in the last few years. This may have had a knock-on effect on the length of time people plan to save for. Now, a fifth of Britons (20%) save for the short-term as opposed to the long-term as they did 10 years previously, whereas a further 19% continue to save for the long-term.

How people have shifted what they save for, and how they restrict their spending over time:

  • Fewer people are now saving for a holiday or special occasion, and this number has dropped over the years from just under half (47%) in 2007 to four in ten (40%) currently*
  • This trend also follows for those who are saving money for house purchases, mortgage payments or home improvements with 41% saving for this reason in 2007, compared to just a third (33%) currently*
  • The ability to save for retirement has also decreased with 38% putting savings aside for this purpose in 2007, compared to 22% now*

*Data relates to 2007-13 as the base for this specific question changed at this time and the data is not comparable.

  • Just under half (47%) reduced spending on non-essential goods or items
  • 42% state they are now budgeting better than they were 10 years ago
  • One in three (34%) said they no longer make impulse purchases.

Patrick Connolly, Head of Communications at Chase de Vere, commented:

“It is good news that Britons are saving more of their income. The financial crisis has helped some people to understand the importance of having money available for a rainy day. However, the increases are only marginal and as a nation we still aren’t doing enough. Too many people still don’t recognise the need for long-term savings, naively believing the state or their employer will look after them in retirement, while others are simply unable to save more as their household budgets have been squeezed.

“It’s no surprise that we’re doing more online. People have busy lives and it’s far more convenient than going into a bank or using phone or post. This trend will continue especially as many of the best savings rates or investment terms can only be accessed online and, importantly, people are far more confident about the security side of managing their finances online than they were a decade ago.”

Men have out-saved women for the majority of the time between Autumn 2004 and Summer 2011, with this trend reversing for six consecutive quarters until Winter 2012. The behaviour of men saving more is forecast to continue into the next quarter, as only 16% of women think they are more likely to save money in the next three months, against 18% of men.

Gender divide: Women narrow gap in saving almost as much of their incomes as men do

Gender 10 years ago Five years ago This quarter
Male £99 (6.88%) £103 (6.66%) £115 (7.81%)
Female £64 (6.58%) £69 (6.19%) £81 (7.76%)

*Monetary figure is the average saved per head. The percentage figure is the amount saved as a percentage of average income.

What will the next decade bring?

The immediate picture looks slightly more encouraging with 17% of Britons now stating that they think they are more likely to save money in the next three months, with just under a quarter (24%) thinking they will be less likely. This compares favourably to Autumn’s data last year where only 16% thought they were more likely to save money, with as many as 28% less likely.

About this research

The most recent NS&I Savings Survey was conducted by TNS, among 2,426 Great British adults aged 16+ between 03 and 09 December 2013. We also refer to NS&I Savings Surveys with data collected by TNS, in the Autumn of 2004 and 2008. The survey has been running every quarter since Autumn 2004, and is a snapshot of how the nation is saving.

About NS&I

NS&I is one of the UK’s largest financial providers with over 25 million customers and over £100 billion invested. All products offer 100% security, because NS&I is backed by HM Treasury. NS&I products are available over the telephone, internet, post and by standing order.