In thinking most people don't have any savings?

[Hammy02]

I was having a conversation with DP last night and he reckons most people in this country have some savings. I said I thought a small percentage might but not the majority. It's hardly a big issue but I just wondered what you thought? I always assumed most people pretty much live on their income and have little, if anything left over at the end of the month?

fair point, Ryoko!

just take the documents I listed, they only need to see that you are who you say you are, and that you live where you say you live.
If you've got a driving licence, you could take that, too.

It's true that the people with all the savings are old people. When Northern Rock crashed, there were queues of old people outside their branches, and a spokesman said that most of them were drawing out £100K +.

Also, a friend of mine is a financial adviser for a bank. He has to help elderly people with their accounts. He tells me that he turns up at manky old bungalows with threadbare old furniture and is lucky to be offered an own-brand digestive biscuit. And very often these people have hundreds of thousands of pounds. He said that so many of them are so mean .

Our overdraft is interest free and has no charges because it is an agreed overdraft. We still try and not use it on a month to month basis though.

that's also because they grew up with nothing, or not much.

It's ingrained into old people to be frugal.

You're probably mistaken (although not being unreasonable) to think that most people have savings. I have savings because I factor an amount into my monthly budget to be set aside and 'pay myself first'. But a few years ago when my mortgage advisor asked if I wanted to consolidate all my debts into my new mortgage and I didn't have any he was shocked. 'Most people', I was advised, typically have £20,000 of debt. Could be different today post credit-crunch, of course.

gramercy that's a bit of a nasty thing to say. My granddad spent his last few years terrified he'd not got enough money and would get kicked out on the streets - nothing my dad said would reassure him and he was genuinely very scared. When he died we found he had thousands of pounds in an account - he just didn't understand any more that it was enough.

NotEnoughTime - if your mortgage rate is higher than the interest you get from the bank (you have to pay tax on bank interest also) then paying extra into your mortgage is OK advice.

However, if you mortgage doesnt allow you to take that overpayment OUT again in case of emergencies, then you really need to hold some money back. If something bad happens (e.g. losing job) then you need money to tide you over till you find a new one.

I try and keep 3 months of frugal living expenses (mortgage/food/bills) held back, as its about how long I expect to take finding a new job.

"We were told it was foolish to save (for want of a better word) while we still have a mortgage"

Make a distinction between short-term 'rainy day' savings and long-term. You need some easily accessibly money to cover you in case of job loss, emergency house/car repairs. And you need some short-term funds to cover big expenditures like a holiday or Christmas. Beyond that, if the interest you can get on your savings is substantially lower than the interest you're paying out on your mortgage, consider using anything you have spare to shorten the term and pay a little off the capital.

The exception is your pension. Make regular contributions to that throughout your working life because it's very difficult to catch up if you only start paying into it at the end.

People should save but many don't. I set aside a certain amount of income that must be saved every month.

NotEnoughTime - There is a couple of things to consider with this policy. First what is the interest you are paying on your mortgage and what interest would you get in savings? For example I have a very low interst rate on my mortgage (less than 2%) and we have the bulk of our savings in fixed deposits which earn between 3-4%. Therefore even with tax on the income earned it still makes sense for us to save rather than pay down the mortgage.
We are very risk averse as a couple so our money is in savings accounts but you could get an even higher return if you invested in something else - shares, funds etc.
The other point is that once you pay money onto your mortgage it is gone. You can't get it back. So if you do need cash at some point for emergencies etc you will have to borrow at a significantly higher rate than your mortgage. Cash is valuable because you can control how it is spent and invested, it gives you choices and security.

" He said that so many of them are so mean"

And so many of them have saved all their lives because they are terrified that one day they'll have to go into a home and won't have the money to pay for it.

We did but 3x maternity leave has depleted funds almost totally. Am also paying back a loan so savings wouldn't be sensible, but am uneasy being so exposed as we're usually financially cautious. Once the loan is paid off I shall start building the contingency fund again.

Apart from pensions, we have an endowment (hollow laugh) that we've kept going as it has some kind of critical illness cover tied to it, although the mortgage is repayment now.

I would have to be working full-time for us to have proper savings - only to be wiped out by uni fees no doubt!

No not true at all, we've had to spend a lot to get us over rough patches recently but we are topping the pot up again and will do so before we go on another holiday or anything like that.
I don't like to have less than £10k and a years mortgage to one side, in fact I wouldn't have bought the house without that cushion.

A trick I used to do when I had an interest free overdraft was to max it out and put the amount in a high-interest savings account. Making money from money

As a couple we have a few months outgoing stashed a couple of thousand easily accessible which is added to monthly,save monthly towards annual expenses and have a savings account for baby DD that we pay into monthly as well.

I also have about 4 months mortgage payments David in a separate account for my batchelorette flat that is now rented out.

We only earn about £15k between us at the mo due to mat leave and dh retraining. We save £300 p/m at the mo,£200 for genuine saVings and £100 towards annual costs. Plus a little for dd. We factor this into our budgeting. Might not be able to for about 3 or4 months next yr when my smp stops,but no bigger. I'd feel uncomfortable without anything,and short sighted not to try to save.

DH and I put a whole £10 each a month into an account for a bit of emergency cash, it has been used to pay car tax and service costs etc. It builds up quicker than I thought as it gets forgotten about till needed. I was quite proud of persuading DH on that one, just saves making current account empty, or hitting CCs.

I don't have any other cash savings, but do have a pension and am also lucky enough to now work for a company offering sharesave and discounted shares. I probably wouldn't be saving at all had I not been offered this opportunity by my employer though - it comes out of my wages before I get my hands on it!

We have almost paid off our credit card debts accumulated doing up the house and I am looking forward to saving properly! DH is a SAHD at the moment so it probably won't be much, better than nothing though I guess.

We have had a terrible habit of just ordering what we want/need from the internet when we fancy it , so need to get back to the habit of saving up and not buying things unless we can afford it. It has probably been a bit worse since DS came along as we buy stuff for him too.

We urgently need to build up some rainy day savings now our mortgage repayments have fallen.

The only savings we currently have are for DS's university - that's at least 14 years away, but we've been getting family to put money in for birthday and Christmas presents.

Thanks to all those who gave me their free, I hope ;) advice.

I think we will continue to pay off our mortgage but also look into opening a "rainy day" account that we could get instant access to if ever, God forbid, that we desperately need it.

Always have an emergency amount of money that can be accessed easily.

And we regularly put money away, but in investments rather than savings accounts iyswim.

I'm always shocked by people who don't have anything put aside. Onviously some just don't have anything left after their essential outgoings, but others spend money on expensive clothes and handbags, lots of nights out etc then say they have nothing put away. I don't know how they sleep.

Why is it foolish to save when you have a mortgage?

Surely if you don´t spend all your earnings then you have savings of some kind?

Nope, we certainly don't have savings, neither does anyone we know. My dad could never understand why people my age (26) don't have any savings as he is such a stickler for putting money away. Neither me or my partner earn a massive amount of money although he does earn quite a bit more than i do but we live within our means, aren't extravagent and still have nothing left over at the end of the month. And if we do by some miracle have spare money this is used to go for a nice meal etc and when DD is older will be used for day trips out etc. We have a credit card for emergencies!

We have savings - a fair bit really.

But I don't have enough money to replace my boots (my only winter footwear) until I am paid next week.

A bit mad really

Oh - and we always live hand to mouth during the last week before we are paid.
Maybe we should save less.

I dont have any savings but ive just opened a savings account.

I dont know how much to save for example what %, any advice?

I don't have any debts either though and my mortgage is small and be paid off in 5 years.

BUT can't help think I've got in wrong though as don't have any nice clothes, hair done regularly etc...