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.

Yes definitely a correlation and I am wondering from the responses - although it's impossible to know - if age is a factor too, and slightly older generations are more careful about saving, or more able to?

I am Gen X - the rave generation - although not sure I can blame that for my current lack of savings!

Unless your mortgage rate is over 7% you are financially better off putting money into savings anyway.

What’s your current mortgage rate? If it’s less than the savings interest rates you’d do better to save and get the interest and if you haven’t needed to use it r emergencies then you can put the amount into your mortgage once your fix is up.

We have quite a bit of savings, but mainly due to multiple redundancies and then because the whole WFH thing meant I could go back to earning a London salary, while WFH and still bring around for Dd school runs which equals no child care. So we had a few years of being able to save a lot each month.

Now I'm back to working on local money, part time and means we won't be able to save as much.

We do also have some debt but it's all zero percent so no point paying it off with savings when our savings is getting good interest.

I dont do formal savings other than pension but live well below my means (and always have even in my first job) so periodically what builds up on my account gets moved into isa or PB or whatever.

Are you saving much for the kids? Imo it really isn't wise to save in their name unless you have money to burn. Yes it's sensible to save to help with uni fees or their first car or mortgage or even trip round the world but it will be their money when they turn 18 and they can spend it as they wish and then still need help with uni costs.

Save that money for yourself, if you need it then you've got it, if not it can be used for their futures as required.

This is also my reality - people close to me saving for retirement, then not getting to retire. Does make you think.

I didn't have savings a few years back and sorely regretted it when my job sucked and I couldn't afford to walk out and take them to a tribunal. I vowed then to always have 6 months living costs (lower than 6 months salary!) in savings. I stuck out the job through CVOID and got a good redundancy in the end, but they should have just made me redundant in the first place! it wasn't great, so I will always try to have some money available to get out of a hole.

I had overpaid my mortgage a bit so should have kept that as savings.

I’ve named changed for this! I have £137 in savings! That’s it. I do have my pensión which I pay into along with my employer. Each month my salary is gone between rent, bills, car, fuel etc.

I now have a ds off to uni- luckily the eldest graduated last year! But I also have bipolar which means I’m terrible with spending when I go hypermanic. Known to blow all my wages in one day!

But I am slowly doing my kitchen up, so piece by piece I’m saving and buying things- fridge freezer was the biggest outlay, next is oven and hob.

But I do take holidays! We’ve been away 4 times this year- twice abroad and twice uk. My view is life is too short. I want to enjoy the world and I encourage my kids too. Youngest is currently away partying before University.

Yes it worries me sometimes. But I’m lucky I live in a housing association house, so boiler etc I don’t have to worry about.

Do I wish I had a mortgage? Of course! I’d love my own home. But I also think with my mental health I’m more secure where I am now if that makes sense?

This lady has some good advice on the order of financial priorities. Mortgage overpayments should usually come last. Martin Lewis says the same.

m.youtube.com/watch?v=WSoqUdd39-Y&pp=ygUNU2F2aW5ncyBvcmRlcg%3D%3D

Not sure that works because the interest on a mortgage is a lot more than the interest on a few hundred quid in the bank - so still makes more sense to get the mortgage paid off as quickly as possible. Unless my maths is wrong.

What is your current mortgage rate? If you're still on an 'old' fixed rate from a year or so ago, you really shouldn't be overpaying it as you can beat it comfortably with savings. I've just opened an instant access account with Santander paying 5.2%.

Therefore, stop overpaying and put your spare money into savings instead and hey presto, you have savings and you're also profiting nicely from your low fixed rate mortgage.

I was in a bad relationship in my early 20s and got into debt. Once I left him I was determined I would get out of debt and would never be in that situation again. I paid everything I had spare on debts and lived very frugally.

Once I was out of debt I didn't stop. I taught myself about personal finance and investing. Saving and investing are definitely a priority, I spreadsheet everything and there is no way I would go on holiday or buy unnecessary items without having savings.

I get that for some people it's near impossible to save. But I also think that a significant proportion of those with no savings have the wrong priorities.

It's far less about age and a lot more about your social status

If you have always been in a minimum wage environment you are much less likely to have savings - and it's much more likely your friends will be in the same social group as you and so have lower than average savings

Ditto if you mix mostly with people like you in terms of risks you will take and your consumerist nature

Sone people by nature are better at curbing current desires with the desire to have more later

While a number of people have no or very low savings the reality is most people do and it’s a lot higher than £600.

Not sure that works because the interest on a mortgage is a lot more than the interest on a few hundred quid in the bank - so still makes more sense to get the mortgage paid off as quickly as possible. Unless my maths is wrong.

@horseyhorsey17

Your maths is wrong. The size of the balance is irrelevant. 7% on savings will always beat 5% on a mortgage. You just need to compare the interest rates.

Yes, your maths is wrong. It's a simple comparison of interest rates. If you have £1000 spare and your mortgage rate is 2% and you use the £1000 to over pay your mortgage, in a year, you save £20 of interest.

But if you put your spare £1000 in a savings account paying 5%, you earn £50 of interest, so you're £30 up compared with overpaying. You'll still pay the same interest on the rest of your mortgage either way, because you still owe it.

Then when your fixed rate ends, you pay your savings off your mortgage and due to the higher interest earned, it goes down by more than it would have done if you'd have overpaid as you went along.

Just curious are premium bonds worth investing in ? They don’t go up in value. Also has anyone u know won on them and how much would you put in.

It would very interesting to know the bracket those with & without savings fall into.

I think it could be learned behaviour too. My parents are middle class professionals, both earning good salaries in their time and they have a nice mortgage-free house due to final salary NHS pensions, but they've always been crap with money. Well, they spend it all on holidays - they go away all over the world several times a year. I sadly can't afford to do that as I am but a humble writer. But it's the behaviour that's been modelled to me since I was a nipper.

We have savings and private pensions (we're both self-employed, no kids).

Savings are around 10k at the moment. We're in our thirties and own our home with a small £360 mortgage.

It would be interesting to know the age bracket those with and without savings fall into.

I have £100 in Premium Bonds that my granny bought for me when I was born. In 45 years I have won £50 (I was 10 and used it to get neally all the Natwest childrens savers pigs in one go 🤣

It does, because let’s say you have an interest rate of 2% on mortgage and 5% on savings account and you overpay £100 to the mortgage each month. That £100 could either go towards the 2% interest or gain 5% interest in savings.

Age 35, millennial. Savings, pension and overpay mortgage.

Thanks, food for thought. My mortgage advisor told me to overpay on my mortgage so I just did that.