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British savers face "reality gap"

20 January 2005
How people act does not match people's attitude to saving, a new report has found.

IFA Promotion has found that while most UK residents do not believe they can save any more than they currently do, two people out of three spend cash on unnecessary luxuries.

The financial advice firm found 71 per cent of Britons believe they cannot save any more, and 12 million adults are not putting anything away.

However, 63 per cent of the people who think they are at their savings limit also say they spend money on unnecessary items.

Arguably worse, 54 per cent of Britons said they would not "reduce unnecessary spending in order to save more".

"Long-term saving just doesn't seem to be registering as a priority in the British psyche, but it's never been more critical," said David Elms, chief executive of IFA Promotion.

"The only way the UK's vast long-term savings gap can be addressed is by first closing the reality gap between what we need to save and what we think we can get away with," he added.

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