The British Bankers Association (BBA) has launched a public consultation to find new ways to encourage more people to save.
Economists, consumers groups, academics and members of the public are invited to submit evidence and ideas about how to address the sharp decline of savings levels over the past four decades.
In the BBA ‘Future of Saving’ consultation, respondents are invited to answer five questions:
- Why do British people save less than residents from many other countries?
- What more could banks do to encourage their customers to save?
- Should ministers consider ending taxation on all savings products?
- The BBA has called for the creation of new work-based savings products that workers could transfer to different employers. Would you support this and if so why?
- What other policies by governments and regulators could encourage more people to save?
Emergency fund
This is the first pillar of any sound financial plan.
Yet around 13 million people do not have enough savings to keep up with essentials for a month if their income dropped by a quarter, according to a recent report by Step Change Debt Charity.
Shockingly the same study also said that 16 million people have no savings of any kind.
Hand to mouth
A separate report by TISA “Our Financial Future” highlights a significant cultural shift in attitudes towards saving and concludes that the UK faces major issues, especially around retirement provision, unless action is taken.
Anthony Browne, chief executive of the BBA, commented:
“Many people in this country are simply not saving enough. The rising cost of living and rock bottom base rates haven’t helped that in recent years, but actually the savings culture has been falling since the late 1970s.
We have gone from a nation of savers to a nation of debtors – this is bad for individuals and is not in our country’s interests.
Without a rainy day fund to tide them over when their car dies or the boiler explodes too many people are driven into the arms of high-interest lenders.
Economies with high levels of saving have more money to invest on infrastructure and other important things’’.
Our view
We are significantly wealthier as a nation than we were in the 1960s and 70s.
This has not translated into higher savings as you might imagine but massively increased consumption.
Given the marketing budgets for consumer items vs savings plans can we really be surprised? Is it really down to the banks to sort this out?
A saving culture is exactly that, a culture. That means it has to start from a very early age. That means school.
Can we really hope to turn this around until serious resources are put into educating the populace?
Sources: https://www.bba.org.uk/news/press-releases/your-chance-to-help-rebuild-britains-saving-culture-2/