to think most people don't have savings?

[horseyhorsey17]

I realise this is going to get a whole range of different views and experiences and I am interested to hear them all, but I recently read some research saying that most families in the UK have less than £600 in savings. This got me wondering - I am a single mum with two teens and a mortgage, and I don't have savings as such but I do have a private pension (had it for nearly 20 years now) that I pay roughly 5% of my salary into (as well as a work pension) and I overpay on my mortgage. I consider this a more effective use of my money than saving, which I can't afford to do as well. Do most people have pensions AND savings? Or neither?

Just really curious as I spend my salary every single month and all my friends do the same. That might be just my peer group! I suppose I could save if we never went on holiday - but I'd rather have the holidays tbh. You only live once and you can't take it with you, etc etc.

I have some friends with savings and some who don't. We have quite a bit saved but this was mainly due to saving since I started work and building it up. I also met my husband when we were quite young too so having two incomes helped.

To answer your question OP I think you're probably right that many people don't have many savings other than pension.

Certainly if you're a recent graduate paying off university loans, or have just bought a house or have young children it's pretty hard to save more than a bit every month. It gets easier as you get older and particularly if you're lucky enough to make money from property ownership.

In theory everyone should have savings but for a lot of people at the moment there isn't enough slack in the system.

I have some savings, nothing much, about £1k but we have been one a big long haul holiday this year, and brought our first home. Next year will be much quieter and I hope to save another £2-3k over the year. I have a pension but not an ISA, that’s a good idea to put money away for children’s university fees.
I have friends who have much more in their savings but they don’t have children!!

They don’t.

They may have had savings at one time or another but people often have to cash those in: a renovation project that goes over budget; a wedding; significant car issues and so on.

Most people do save. But, rainy days also happen.

No savings. I have paid for my funeral ( daughters only need to ring a number.. ) l am old( ish) l holiday abroad 6 times a year( just a week at a time). I rent.
Treat my Grandkids.. no debts but I'm enjoying what l do have.

We have instant access savings in the form of premium bonds (maxed out), which we would use for e.g. emergency repairs etc. We max out our pension contributions and ISA allowance every year and then also have other investments in shares and bonds. No mortgage - when we did have one we prioritised paying that off first.

We have cash on hand for emergenies. There's always tons of stuff around the house that needs fixing or a car repair. Sounds like you're doing well, but if it was me I'd stop over paying on the house (and maybe the investing too) to build up some emergency savings.

Have a pension but no general savings.

I can save up for specific things - home improvements, holidays etc, but I don't have general non-specific savings.

As a general rule, any financial expert would tell you that you shouldn't even consider overpaying your mortgage unless you've got 3-6 months of expenses in savings.

Personally I'm glad we overpaid and reduced our mortgage balance when the interest rates were low and so have a lot more discretionary monthly spending than we would otherwise now the interest rates are higher.

I've only recently had excess I could save and I'm 45.

I have been paying into an NHS pension for 20 years though.

I really want the mortgage paid off as soon as I can so I can potentially retire at 70! Even though I am not even 50 yet.

I don't discuss finances with my friends, but would be surprised if they don't all have savings, of varying amounts

Looking at cost of living and current economy, I think financial prudence / parsimony will come back into fashion

I would take what your friends say with a pinch of salt, if you are talking about finances and moaning about COL, no one is going to chirp up and say ‘yeah I’ve got a nice little nest of £100k’ but mark my words lots of them will have.

I've always saved, even as a young child. I tend to treat savings like a bill, it goes out the day I get paid.

As well as a pension and mortgage over payments like others I have three broad categories of savings -

Long term investment - a stocks and shares ISA

Emergency savings - a cash ISA with money to be used in the event of job loss, illness and major house repair emergencies.

Slush fund to help smooth monthly expenses - so we will dip in to it for holidays, big ish ticket items (new shoes, new coat, new mobile etc..) or fun stuff.

Even in the current financial climate? I'm on a fixed rate for 5 years but goodness knows what will have happened to interest rates after that, I could end up paying a lot more for the same thing - and then I definitely wouldn't have money for savings - so it makes sense to me to try and get it paid off as soon as I can rather than putting money into savings.

I put my money into pots and let it build - Christmas I have 1k already, car maintenance £100 a month, my NHS pension I pay 12.5% so around £450 a month but never see that as savings funnily maybe because I have done it since I started work 25 years ago. I also have a lump sum in a high interest ISA that I am using to save to overpay my mortgage and around 5k in my current account that I can put my hands on straightaway. I am a single Mum with teenagers but budget well I think overall.

I used to have savings but then stuff happened, and now I'm down to £650 in Premium Bonds, and that's it. Living hand to mouth otherwise.

I have a very good credit card with a generous limit (plus rewards) if there are emergencies.

Though that being said, we worked incredibly hard to pay the mortgage off last year, so that's something we don't need to worry about anymore. I appreciate that makes me very lucky.

I am 100% sure none of my mates have a £100K nest egg!

I'm inspired by people's savings stories. I am not a natural saver. It took me ages when I was 10 to save up the £14 I needed to buy a Sindy horse and I think that might have been my peak saving experience.

Personally I've never lived on a "pay day to pay day" basis since my student days. We've always had a cash buffer (and also some in shares etc) and that buffer has roughly gone up as our incomes have gone up. There are times when it goes down a lot eg after paying for a house extension but it is never close to zero. We also have both work and private pensions. We don't intentionally set aside savings each month, it just happens. We have high, but not super-high earnings, and our natural tendency is to spend less eg. we are not interested in nice cars, I buy lots of things second hand. I think it is largely because my husband has some income from self-employment on top of his part-time salary (and my full time one). It is quite sizable but also very variable. On a day to day basis we tend to spend as if we only have the salaries and most of the extra income goes into savings.

It's pretty obvious that this is not normal generally, but most of the people I know, who are also mostly pretty well off, tend to have a decent buffer of savings I think. So what I'm trying to say is that savings and incomes are pretty closely correlated, thought there will also be high earning people who just spend it!

@horseyhorsey17

What is the current interest rate in your mortgage?

Regardless, I would say that you should have at least a couple of thousand in savings before making mortgage overpayments.

My experience is of several relatives dying young and not getting to enjoy savings or pensions. You can't take it with you. I earn a good salary and try to enjoy life now.

I've got a little bit. My parents think I should have more. I'm single and comfortably off. I put some away each month, not as much as I'd like, but it is what it is. My out goings are much higher than my parents were when they were my age. And they had two incomes.

It's odd to me how "you only live once" is only ever used to talk about spur of the moment joy.

I have always thought "you only live once - put in a little bit of prudence and care, and that once can be free of worry and the daily grind of money woes".

But I appreciate that wouldn't fit on a tote bag.

I've been a saver since I've been an earner. I've never not had savings.