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’m a saver, always have been. However, that’s easy as I’ve always been a high earner too.
Points when I’ve saved less we’re when the kids were very little.

We are extremely fortunate to have family money too.

I think people may be shocked at just how much some people have, and also how much some people don’t! This is the difference between appearing rich, and being wealthy. Impossible to tell.

I remember the money saving expert (Martin Lewis?) saying one should have at least 3 months of net income for emergencies. I suspect he was thinking of redundancies, as you cannot necessarily guarantee a payout, if the company goes bust.
I think that should be the aim, however little one earns, so that there is something for an emergency.

Mind you, I am very middle class and none of my close friends has pots and pots of savings. @horseyhorsey17

How do you know though? I don’t sit around and discuss how much my friends save each month or have saved in total. Do many people?

Sometimes I think the “I have no savings and no one I know cares about saving” is the adult equivalent to the whole “I never revise” of school times. Most people do and just quietly get in with it.

We always had a bit of savings (probably a couple of grand) but mostly overpaid our mortgage. Once the mortgage was paid off saving became a lot easier!

I don't have any savings.

"Whereas I think I just have a deeply embedded working class mindset and I don't think I'm broke until I'm standing in Cash Converters with a box of old phones 😂"

🤣🤣 maybe I should be LOL

No, most people do NOT have savings. See https://themoneycharity.org.uk/money-statistics/january-2023/ (my understanding is that the debt figure here does NOT include mortgage.)

Also, some of the earlier posts on overpaying mortgages are total bollocks rather misleading. Of COURSE it is better to invest at 6% than to overpay at 2%, but really, who still has a 2% mortgage? Read Martin Lewis on the subject, don't just guess!

https://www.moneysavingexpert.com/mortgages/mortgages-vs-savings/

That is so true. We have a lot stashed and no mortgage, but I still discuss mortgage rates with people as if they impact me.

But equally what if you never do the things you enjoy because you’re saving for retirement and then you have bad health or die early and never get to enjoy the benefits of a lifetime of saving.

Yes, we talk about everything. Plus I've known most of them for years and they'd definitely have got a few rounds in if granny had left them a few K!

As mentioned the people, I know that are well off are older Gen X and therefore house prices were much cheaper and in long term relationships. The friends I have who divorced or who coupled up much later in life are far worse off. My mate met the love of her life at 47, she had always lived alone. She was on a very similar salary to me but she had to pay for everything for all those years. She also refused to house share, we were very young when we became friends. So she lived in a two bed flat alone and I slummed it with housemates but everything was split four ways. That was her choice but it meant I could start saving when very young. My shared house was a dump but was so cheap, it was also in a very rough area.

Even if some posters do talk to friends about how much savings they all have,🙄 I wonder how many will exaggerate, bend the truth, or outright lie out of embarrassment, knowing their friend has apparently thousands in savings.

I'm a single full time working mum and I have a 35k yearly salary.

I have been lax about saving in the past and thought YOLO, ill just have that holiday or what not. I also vape, so trying to quit this very expensive habit.

Some months I can save, others I can't.

I have £1,500 in savings at the moment and a pension plan with work (and all previous jobs)

I like to have a buffer, so if I need the money I don't have to pay any interest on it, so instead of using my overdraft (I have got one for emergencies) I'd rather have £1000 in the bank and use that as a 'zero' balance, I also like to have 1-2 thousand in savings for eventualities.

For instance, my car has just been written off in a no fault (on my part) accident, courtesy car isn't bloody forthcoming(!), DH works shifts so needs his car, and we go on holiday at the end of next week , because I've got that bit of savings I can go and get a new (used) car now with no faff, and in the meantime I don't have to worry about making repayments or paying interest on what I've 'borrowed' from my savings, the insurance payout will mostly pay it back - when it pays out! I could use my credit card if I needed to, but some circumstances it's not accepted and you need to have actual cash in the bank to pay for things.

A two person household who both work full time it can be achievable to do this, but for single parents or single person households, it's just not doable a lot of the time, you have no choice but to just manage month to month. the problem with that is if you DO need money for anything unexpected it's likely you will have to borrow and then start paying interest as you can't afford to pay it back straight away, which you've got no way of getting out of, and if you do default any options you did have are suddenly revoked, it's a slippery slope and the banks are all to ready to give you the rope to hang yourself with. I've been there when I first moved out in my 20's, it's awful to feel so powerless, and it's a lot of peoples day to day reality.

Had I been on my old wage, no savings at all, wouldn't have even been able to afford rent, council tax, bills, food.

I have a 2 year fixed ISA with £3000 in it I intend to put another £3000 in it next April when the renewal comes up as I found when it’s in an ISA I don’t spend it so I consider it long term savings. I’m only £200 away from this so will meet this target next month. £6000 in the ISA. Once this is met I will then save £500 a month into a holiday/ trip fund from October. For next summer mainly. I could use this in an emergency too if needed for repairs. Thr following year in September I do the same get to the £3000 mark for the ISA and then save for a holiday.

I was attempting to save £500 a month which I do but I found that when I left it in a just a normal bank account I’d be tempted to withdraw it if I fancied a treat/ clothes/ theatre tickets etc

I do also have a state and teacher pension that comes out automatically before my net pay.

Monzo has helped me to budget a lot especially as it has pots you can assign a category for monthly spending.

However I can do this because whilst I have a partner I own a one bedroom flat in a new build where I live alone and bills and mortgage are generally low. If I had kids I’m pretty sure I would not be able to save £500 monthly.

Given your user name OP horses are the biggest hindrances to being able to save . If I hadn't had them id would be a lot wealthier .

I agree with others in that your life stage and age plays a big part in how much savings you have .

All my friends are 50's and we're all very comfortable, probably because we're on the cusp of retirement and have saved for years .
For me I have an instant access emergency fund , a big fund for 3 holidays next year inc Japan and Thailand , a huge fund for vets fees should they be needed .
My most significant sum is my pension which is sat there until I decide to retire which as I love my job I'm not sure about .
Like most I lived pay cheque to pay cheque when young but always saved something when I got paid no matter how little .
We all agreed though that our efforts were as a result of having middle class parents who always pushed aspiration into us to do well at school and drum home the need for a good job aswell as some financial guidance to make saving a habit , short term , medium term and long term , a bit for each .
I feel very lucky.

I think the people I know are a pretty 50/50 split between having good private pensions, savings, ISAs, investments and people who spend everything they’ve got either because they don’t earn a lot and live from payday to payday or because they’re reckless with money.

I would love to have savings. I have had them in the past but always seem to break in to them for something or other. I actually have some at the minute but it’s spoken for for house renovations.

I did plan on overpaying my mortgage but now rates are going up I won’t be able to afford it.

"There’s an extraordinary number of six figure earners on MN. And somehow they find time to post extensively throughout the day … 🤔"

The higher up you are in a role, and higher in salary by default, the more control you have over your own diary. The more you earn the more you are reviewing work than doing the work so these kind of roles are going to have much more availability to be on their phone than say a lower earner working in a call centre, on a shop floor or a building site where their output is more monitored.

I didn't think I'd ever own my own house so am still quite chuffed with myself that I do. I also thought all this was normal - seems not!
Well, it's normal for me, and lots of my friends.We were all independent from 17/18 and lots on either frontline public sector jobs or creative freelance jobs.I was a lone parent for years and years too so there just wasn't any extra money. Or, if there was, it seemed too little to bother saving ( see not the correct mindset there!)

DH and I have always been quite cautious, having both been made redundant in our working lives, so we've never lived up to our means. This doesn't mean that we haven't had nice holidays but we don't drive expensive cars (and buy them outright) and rather than having two weeks in the Maldives, will have city breaks in Europe. Our house is also smaller than we could have afforded in theory.

Each month I pay something into savings as soon as I get paid, so it's gone. Occasionally I have to borrow from myself, but it's quite effective. I have always saved, right from my first job when I could only afford £100 a month, but I forced myself to do it.

If I were ill/disabled tomorrow I might regret not blowing money on a trip to New Zealand, but on the other hand I might not get there anyway now with long haul flights being an eco-sin (when I was very small I went there by boat!_

Generally speaking @horseyhorsey17 if you can get a better rate in a savings account than the interest rate you are paying on your mortgage then you should opt to save rather than overpay your mortgage. Santander are offering an easy access saver paying 5.2% for one year right now so assuming your mortgage rate is less than that you would be far better off putting the overpayment into the savings account and then paying it off your mortgage asa lump sum when the rate ends.

We have savings (individual and joint) but we live very cheaply day to day despite both being in professional jobs, no finance deals if we need something expensive we save for it (took us 8 years in the case of the roof!) We do go on holidays but again save for them and live frugally the rest of the time.

My DH had a number of redundancies due to industry changes and I got myself out of a lot of debt so we are now extremely careful of budgeting and savings - spreadsheets etc!

So if you get sacked on Friday, how will you pay your rent/mortgage in two months' time?

We don't have a huge amount of savings right now, as we over pay on the mortgage. We have a rainy day fund, and investments, which would cover emergencies, and we keep it topped up, but we're trying to get rid of our mortgage within the next year, so we don't waste (in my opinion), putting it in savings.