Salaries too low to fund savings accounts says Birmingham Midshires

13 September 2007
More than half of people in the UK believe they need to earn more if they are to put some money aside as savings, according to a new study from Birmingham Midshires.

Director of savings operations, Jason Robinson, said: “The big concern is that savings seem to be viewed by many as an unaffordable luxury.”

The company’s Saving Britain report indicated that 55 per cent of Brits believe their current earnings do not allow them to save.

Indeed, the report found that in order to pay money into savings, people in the UK felt they would need to earn an average of £1,824 per month. However, 33 per cent believed earnings would need to exceed £2,000 before they could afford to save. A further eight per cent claimed they could not set aside savings on a salary of less than £36,000.

The 35 to 44 age group were appeared to be under the most financial strain, claiming a monthly salary of just over £2,000 was necessary to save. However, the younger age bracket felt £1,423 would be sufficient.

Other findings revealed that those living in London felt they would need to earn £24,500 annually if they are to save, the highest across the UK. Only 9 per cent of people in the North East believe they earn enough to save, compared with 19 per cent in Yorkshire.

There was also a substantial difference between divorcees who felt they were able to save, with 75 per cent claiming they could not afford to, compared with 53 per cent of those who were married or in a civil partnership unable to save on their current salary.

However, Mr Robinson strongly advises people to save and points out that savings do not have to involve large sums of money. “With interest rates at an all-time high, there has never been a more opportune moment for people to set aside their money in a lucrative savings account. By putting aside a little and often, it will not be long before savers reap the benefits of adopting good savings habits,” he said.

Find out more about Birmingham Midshires and regular savings accounts