How people plan to save cash in 2018 - if they can afford to...

Monday, 12th February 2018, 9:36 am
Updated Monday, 12th February 2018, 9:39 am

A quarter of adults in the UK are too strapped for cash to be able to save or invest any money in 2018, according to new research.

A study by GoCompare Money revealed that, of those who feel able to put some cash aside, most (40 per cent) will save using a bank or building account or cash ISA (38 per cent).

The research found that despite low rates of return on offer, most people are likely to put any additional funds they have into deposit based savings or a coin jar. While stock markets have reached record levels recently, only 10 per cent say they would put money in stocks and shares and nine per cent in an equity ISA.

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Men are more likely than women to invest in equity related products - they are twice as likely as women to buy stocks and shares, while 13 per cent of men compared with only five per cent of women plan to invest any additional money in 2018 in an equity ISA. Men are also considerably more likely to invest in virtual currencies such as Bitcoin (seven per cent compared with just two per cent for women).

Matt Sanders, from GoCompare, said: "Many people have seen their income squeezed by higher inflation and lower pay rises. The increased cost of daily essentials has undoubtedly put pressure on household budgets, leaving many feeling financially stretched and unable to put any money aside in 2018.

"Our survey revealed that many households are expecting a financially bleak year with 40 per cent of adults anticipating a very difficult year.

"However, we would urge that, wherever possible, people put money aside for an emergency fund to cover unexpected expenses such as repairs to a car, boiler or other household costs. Ideally, households should aim to have at least three months' living expenses set aside in a cash savings account as an emergency fund.

"For those feeling financially pressured, reducing outgoings should be the first priority. Car insurance and energy bills are two areas where costs rose steeply last year but, they're also two of the easiest products to shop around for. For instance, customers comparing and switching using GoCompare could save up to £279** on their car insurance."

Matt Sanders continued, "Even if you can only manage to put a few pounds each week into an emergency fund, small amounts soon add-up and could be a financial lifesaver when things unexpectedly go wrong."

For more information on building up an emergency fund visit: http://www.gocompare.com/savings/emergency-funds/