With payday around the corner, we were struck by a recent story highlighting that huge numbers of people have little or no savings.
This is a stark contrast to another piece published today claiming that parents could make their children millionaires by the time they’re 38 if they make the most of the saving opportunities available to them. It sounds simple, but parents would need plenty of spare cash in the first place. However, even if they don’t, using the same principles and investing what you can will make financial headway. Junior ISAs, cash gifts and pumping money into a stakeholder pension are all ways for parents to build a nest egg for their children.
At the other end of the spectrum are the people who find it hard – sometimes impossible – to save anything for themselves, let alone their children. More than 16 million people in the UK have savings of less than £100, according to a study by the Money Advice Service (MAS). Even more worryingly, in five areas of the country (Northern Ireland, the West Midlands, Yorkshire and Humber, North East England and Wales), half the adult population have savings below that level.
One man in the study who’s 53 years-old and from the West Midlands, earns £13,000 a year delivering stationery and installing furniture. Six months ago he wasn’t managing to save anything. He said he was working to eat and survive and that saving was an impossibility. But then he got involved with a MAS project to learn about saving and has managed to save £800.
The MAS says that saving small amounts on a regular basis is achievable for most people but it seems that they may need a little help or advice from the experts as to finding ways of making savings.
Some might argue the saving needs to start in childhood or in school. Wages clearly make a difference but what’s crucial is advice and guidance at whatever level – there is a need for clear communication to clients at every stage of their financial planning journey.