Top 20 things Brits are saving money for - including a holiday, and retirement

06 October 2023 , 14:08

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One in ten Brits say they would need at least £100 left over at the end of the month to consider putting any money into savings (Image: Getty Images)

Money-savvy Brits have revealed the top things they are currently saving for – including a holiday, retirement, or simply building up a rainy day fund.

More than a third of adults (37%) are currently putting money aside for a specific goal – such as a new car, moving house, or a home renovation or extension.

And the poll of 2,000 adults found that four in ten (39%) consider themselves to be savvy when it comes to saving – although admit they are better at putting money aside for short-term goals, than longer-term ones.

However, a quarter of those polled said they would not put any money into savings if they were left with just a few pounds at the end of the month.

And 12% said they would need to have at least £100 to spare each month before they would consider putting anything away in savings.

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But one in ten (9%) check their online bank accounts multiple times a day – even though 57% lack the motivation to start putting money aside and leaving it to grow.

The research was commissioned by smart money app, Plum – whose experts advise to start saving now, and start small.

Some of the top things they are saving for include a holiday, retirement, and a rainy day fund (Peter Cade/Getty Images)

The savings and investment app has created a new tool to launch Plum Interest, which shows just how much those few pounds could grow over time thanks to higher interest rates.

By inputting the small amount you are able to set aside each month, the tool will show you how much you may have accrued after a year, and two years, with a more competitive rate.

Victor Trokoudes, founder and CEO of the saving and investment app, said: “If you’ve been putting money away for more than five years, that’s excellent – but not everyone has the same motivation, especially if we’re talking small amounts of money left at the end of the month.

“But there really is no time like the present – even £20 a month, over the course of just two years, will add up to close to £500, and that’s before any interest.

“It can be tempting once you get to the end of the month to treat yourself to something, or just roll over what’s left into the new month’s expenses.

“But if there are some extra things you’d like to have in the next year or two, the savvy will typically know when to spend, and when to squirrel it away.”

And a new tool, from smart money app Plum, shows how quickly just a small amount of savings can grow, thanks to higher interest rates (Boy Wirat/Getty Images)

The study, via OnePoll.com, also found that 31% don’t think it’s possible to get a high rate of interest unless you lock your money away for at least a year.

And 27% reckon they’re more likely to spend any available funds left over at the end of the month if they’re not actively saving for a specific goal.

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It also emerged that just 14% know what a Money Market Fund is – an increasingly popular alternative to traditional savings accounts, that focuses on short-term, low-risk investments, with interest tending to closely reflect central bank rates.

A quarter (24%) incorrectly believe it is something that specialises in foreign currencies – while 7% think it’s something that allows you to change out-of-date cash for new money.

Victor Trokoudes, from Plum, added: “These days, you definitely don’t need to lock your money away for years to take advantage of higher interest rates – although some people think that you do.

“For example, putting money into a flexible alternative, like a Money Market Fund, could be a good way of reserving it for shorter term goals, especially if you think you might need to dip in from time to time.

“It doesn't matter how small your initial investment is – with time and patience, it can grow into something more substantial in as short a period as one or two years, taking advantage while interest rates are high. But it always helps to have a specific goal in mind.”

TOP 20 THINGS PEOPLE ARE CURRENTLY SAVING FOR:

1. A holiday
2. A rainy day
3. Retirement
4. Moving house
5. A new car
6. A home renovation/extension
7. Gifts for family and friends
8. Clearing debts
9. New furniture
10. In case of a job loss
11. Garden improvements
12. A wedding
13. A future reduction in income
14. A new item of clothing
15. Children's education (school or university fees)
16. Buying a holiday home
17. Having a child
18. A car for their children
19. A home gym
20. A hot tub

Sarah Lumley