Average savings by age in the UK: How much should you be saving?

The average savings by age in the UK has fallen of late due to the recent pandemic and the rising cost of living. It’s, therefore, even more important to consider whether you’re putting enough money away to support yourself when you retire. You can check the average savings by age and relevant UK income figures here.

It’s a well-known fact that “rainy day” savings are important. These rainy days can be anything from financial and medical emergencies to weddings, university fees, or moving house. Despite the importance of savings being well-known, when looking at the average savings by age in the UK, will you be ready for that rainy day?

Unsurprisingly, people’s attitudes toward savings differ vastly depending on their age and financial situation. The results of a survey published by Finder and updated in June 2024 concluded that around 8.7 million adults in the UK had zero savings, and just under 50% had less than £1,000 in savings.

It indicates that a large number of people in the UK are not inclined towards savings and take it perhaps less seriously than they should. Experts advise individuals to save at least three months’ worth of living expenses – the majority of people in the UK are not at this recommended level. There can be multiple reasons for not saving enough, but insufficient earnings are consistently among the top reasons.

Overall, the data on average savings in the UK is worrisome. In the UK, 9% of Brits have no savings, while over 40% of people do not have enough put away to support themselves for a month in the absence of income. The total number of adult ISAs has been rising in recent years, while the number of people with no savings at all is increasing. Although the number of junior ISAs is going up, the average amount invested in them is plummeting. Bank balances are dwindling, and so are the average UK savings figures.

If you want to put your money to better use, a stocks and shares ISA is the best way to protect cash from inflation and grow savings for the future. With Moneyfarm, an investment account gives you access to expert advice, a wealth of investment expertise, round-the-clock control and a portfolio that’s built to suit your goals. To check out your options, click the button below.

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Average savings by age in the UK

According to the Office of National Statistics data, the average amount people have in savings predictably goes up as they age. According to the ONS, in 2020, the average British household had savings of approximately £27,400. When measured in Q4 of 2023, it was £10,200, having previously dropped to £6,600 in Q2 of 2022.

According to research from Finder, the average person in the UK had £11,185 in savings as of 2024. Younger people have less in savings for many reasons, such as student loans, low salaries, and high expenses, while the average amount in savings increases as people get closer to retirement age.

Comparison of saving habits across generations: Baby Boomers, Gen X, Millennials, Gen Z

According to Finder, as of 2024, 19% of Generation X people had no savings. The same goes for 18% of baby boomers, 15% of millennials, 14% of Generation Z, and 7% of the so-called “Silent Generation.” The indication is that while the average savings amount grows with each generation, people in middle age are more likely to not have any savings.

Figures for the average amount of savings of the various generations are not yet available for 2024, but as of 2023, the silent generation had the highest average savings (£58,606) as they had more time to save with higher incomes. Baby boomers have an average savings of £41,804, Gen X has (£12,939), while millennials and Gen Z have an average of £5,943 and £2,463, respectively.

The only generation that cultivated a better savings habit in 2023 was the baby boomers; the number of people without savings decreased by 1%. People without savings increased by 2% to 10% in the other generations.

Regarding savings habits, baby boomers and the silent generation are more likely to save for retirement, own their own homes, and have higher incomes. Gen X is more likely to save for shorter-term goals, such as holidays and weddings. Millennials are more likely to use technology and AI to manage their finances and save for specific goals, such as children’s education or a home purchase.

Currently, Gen X and Millennials are facing a few financial challenges that are impacting their savings, such as student debt, rising house prices, and cost-of-living increases. At the same time, Gen Z is more open to new financial products and services, such as cryptocurrency, and has just started developing a saving habit.

Average savings by income in the UK

Income is another critical metric that determines the average savings by age in the UK. Understandably, there is a direct correlation between income and savings. People with higher incomes have more disposable cash and can save more than those with lower incomes.

However, despite their incomes, how much money people eventually save depends on several factors and their attitude towards savings in general. Also, people with high incomes tend to have high expenses and need more savings for their retirement.

According to NimbleFins, the average savings amount per UK household in 2024 is £76,301. This figure includes all gross ‘financial wealth’ and comprises current and savings accounts, ISAs, shares, bonds, trusts and other recognised financial assets. However, this average figure is skewed by a small number of households with much higher savings, so it makes sense to use “median” figures.

Median household gross savings in the UK in 2024 is £12,500 (an increase from £11,000 two years ago). However, 25% of households have less than £2,100 saved.

The gap between low-income and high-income households has increased continuously and has become even wider thanks to the recent coronavirus pandemic and the ongoing cost of living crisis.

How much should you save each month?

Retirement data can be compared and contrasted with expected savings data to see how much people should be saving each month. Average British savings are roughly £105.43 per month. However, this figure varies significantly depending on an individual’s income level. The average UK savings amount is approximately 8.21% of monthly income.

A comfortable retirement income is £43,100 per annum for a single-person household. This amount can be the sum of both a private pension scheme and a state pension. The final pension pot size you need to cover this lifestyle is estimated as being between £490k and £790k. This calculation takes a full State Pension into account.

If you assume a moderate retirement lifestyle at £31,300, you’ll still need a good sized pension pot – around £300k to £500k, while for a minimum or basic lifestyle costing £14,400, you’ll need a pot amount between £40k and £70k. These figures come from the Pension and Lifetime Savings Association. Looking at the pot size to support a minimum lifestyle, we think you’ll need a bigger pot, as the average savings by Age in the UK won’t support a decent life expectancy.

UK average net worth by age is some way away from the expected savings and needs a lot more to be saved to reach the recommended levels. If you’re asking yourself, “Is 100k in savings a lot in the UK?” you have to surmise it is not.

How much should you save at 30?

The average savings of a 30-year-old in the UK should be £51,434. However, the general rule states that the amount you should have in savings by age 30 should be equivalent to your annual income.

How much should you save at 40?

The average savings by age goes up to £124,911 when the age of 40 is reached. The general rule for the savings average in the UK by age 40 is to have three times your preretirement income.

How much should you save at 50 and 60?

The average savings by age in the UK goes up to £198,390 by the age of 50, with average savings by age 60 in the UK at around £270,100. Furthermore, the average savings in your account by age 50 and 60 should be six and eight times your preretirement income, respectively.

As you will appreciate, the average savings in the UK by age are less for younger people, but they steadily increase until the age of 50-60. They then shrink post-retirement as income typically stops altogether. Higher-income levels enable higher savings compared to lower-income households.

Comparison of UK savings rates to other countries

One of the most recent studies in March 2024 comparing global interest rates revealed that in a list of nineteen countries, the UK had the 9^th lowest rate at 5.25%. The USA had the 10^th lowest rate while the countries with lower rates than the UK were Canada (5%), the Euro region (4.5%), Australia (4.35%), South Korea (3.5%), Singapore (3.49%), China (3.45%), Switzerland (1.75%), and Japan (0%)

How to increase your savings at various life stages

Increasing the amount of your disposable income is key. Creating a budget and sticking to it is the first step. Next comes doing some careful financial planning. You can also minimise the savings you have in low-interest, easy-access accounts and look at other savings vehicles.

In order to reach the average savings by Age in the UK, it’s important to start saving as early in life as possible. But do not allow yourself to become complacent. Regularly review your budget and how your savings are performing. If necessary, transfer your savings elsewhere. You need to make your savings work hard for you.

Have you ever considered investing?

For a lot of people, the idea of investing their hard-earned savings can be daunting. When cash is traditionally such a safe option, why risk opening your wealth up to the markets? Well, the truth is that cash isn’t a guaranteed safe haven.

As recently as September 20223, UK inflation stood at 6.7%, having reached a 41-year high of 11.1% just one year earlier. It took ages to come down, eroding the real value of savings and helping to create a cost-of-living crisis, which is still ongoing.

With interest on ordinary savings accounts falling well below these figures, many people turned to stocks and shares ISAs to protect and grow their wealth while aiming to reach at least the average savings by age 60 that UK residents are recommended to achieve.

For information on how sitting on too much cash can damage your savings and compromise attaining average savings by Age in the UK, read our full breakdown here. To start with an investment portfolio designed around your long-term goals, follow the button below.

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Average retirement income in the UK

The amount of money required to live comfortably in retirement varies widely from person to person, depending on their living expenses and where they want to retire. Most British citizens believe that an annual income of between £10,200 and £41,900 is likely to sustain a convenient and comfortable retirement.

Beyond that, anything extra would be considered a luxury. However, you probably won’t find anyone complaining about having more than enough money for retirement because financial situations might change over time.

Savings statistics in the UK: Average savings by gender and region

The average savings in the UK differ vastly depending on various metrics. These include gender and region, in addition to age and income. Generally, there is an understanding that women usually have less savings than men due to issues like the gender pay gap.

On average, women in the UK have savings of £11,698, while men have almost twice the amount, £23,951. However, although more men have savings than women, the women who do have savings tend to have more significant sums put away than men.

Similarly, region or location is an important determinant of average savings in the UK. According to research, the lowest average savers in the UK belong to the West Midlands, while the highest bracket can be found in the East of England region. The average savings of people in the East Midlands is £13,306, compared to the £8,901 average in Greater London.

The second-lowest region in terms of average UK savings is Northern Ireland, at £6,710, while the second-highest region is the West Midlands, with an average savings of £13,318. The average savings for Scottish people was approximately £21,641, while the residents in Wales saved on average £13,913 per person. Such a dramatic disparity in average savings by region can be attributed to employment opportunities and other socioeconomic factors.

Average investments in the UK

With interest rates in the UK as low as they are at the moment, millions of people are choosing to invest in stocks and shares ISAs to protect and grow their wealth. The meaningful tax benefits afforded to those investing for the long term make ISAs a smart way of trying to meet or beat inflation and achieve a healthy sized amount. Also, wealth management is constantly evolving to cater to a population with changing priorities and demands.

Since 2008, the average amount invested in a stocks and shares ISA has tripled. This is because people have been increasingly taking advantage of the tax incentives and positive returns that ISA portfolios can offer. The average amount invested in a stocks and shares ISA rose from £3,281 in 2008 to £9,331 in 2019. This trend was due to low interest rates and returns from cash savings accounts lagging behind rising inflation.

The year 2020 saw the lowest average amount invested in stocks and shares ISA since 2016/2017. The average amount invested in a stocks and shares ISA in 2020 was down by 5% at £8,879. However, the total amount in 2020 was over £24 billion, an increase of £1 million from 2019 and a 14% increase since 2015/1016.

The drop in the average amount invested in 2020 was due to the economic downturn caused by the pandemic and the unprecedented volatility of the stock market. According to the FT, in 2024, the UK has 22 million ISA subscribers.

Stocks and shares ISAs are available with a choice of risk levels to cater for different investors’ attitudes. If you want your cash to grow slowly but steadily over the years, a low or medium-risk portfolio could be the most suitable, depending on your investor profile. Conversely, those who want their cash to grow more but are willing to accept a degree of risk can opt for higher-risk portfolios.

Factors influencing average savings rates in the UK

The average savings by Age in the UK or any country are created by a number of contributing factors. Some influence savings at the macro level, while others have an impact on an individual level. On a larger scale, average savings are impacted by the economic growth of a nation and prevalent interest rates.

While higher interest rates make savings more attractive and increase the savings average, higher economic growth tends to increase spending and make saving less attractive. Additionally, high levels of inflation may discourage cash savings but increase the appeal of assets.

The effect of inflation on real savings values in the UK

Since the heady days of 1960, when the UK inflation rate was 1%, it slowly rose and spiked in 1975 to 24.21%. It then slowly came down to plateau at 1.81% in the year 2000 before starting to rise significantly again in 2021, peaking at 11.1% in 2022. It has since taken 2 years to slowly come down around the 2% mark as of May 2024.

The rise in savings rates was significantly lower and slower, which meant that money in savings accounts lost value in real terms. This will undoubtedly happen repeatedly.

From an individual perspective, savings are also heavily influenced by cultural trends. Some cultures tend to be more saving-oriented, while others are more spending-oriented. Levels of income and average age also play a significant role in determining a country’s average savings.

Impact of economic trends on UK savings behaviours

We’ve already mentioned the two biggest factors that affect savings attitudes – inflation and rises in the cost of living. But of course, it’s also offshore economics that fuel increases in inflation. These include things like the Russian invasion of Ukraine, which resulted in grain shortages and gas supplies being cut and resourced. Some will remember the USA prime mortgage fiasco. The increased cost of power supplies and the recent pandemic – all these factors affect household wealth and, therefore savings behaviours.

Other economic factors include people losing their jobs or having their hours slashed during economic downturns, resulting in a drop in income, which makes saving money challenging.

During the cost-of-living crisis, it has become increasingly difficult for people to conserve money and reach the average savings by Age in the UK because of the aforementioned rising cost of necessities like food, energy, and mortgages. People save less or dig into their savings to relieve the financial burden.

The Bank of England has brought inflation under control, which has boosted interest rates. Because of this, borrowing money has become more expensive, which can make saving money more challenging.

As of May 2023, 29% of UK adults experienced a mortgage payment increase. Rising mortgage rates will also hit people who have not remortgaged since interest rates shot up in late 2022 after the ‘mini’ Budget. Approximately 1.6 million homeowners have fixed-rate deals, which will end in 2024.

In April 2024, the BBC reported that more than 7.4 million people in the UK are struggling to pay bills,  also that (5.5 million) had missed paying a bill or credit payment in the six months leading to January 2024. It further reported that 14.6 million people (28%) couldn’t manage financially or were finding it hard to cope.

The ongoing cost-of-living crisis continues to negatively impact the average savings in the UK, especially for low-income earners.

Quick ways to increase your savings

One look at the data around average savings in the UK shows that the situation is problematic. Far more than an acceptable number of people in the UK have no savings at all, while many have insufficient savings to protect them in the event of a loss of income. Therefore, the need for the average person to consider saving for rainy days has never been greater.

The smartest way to reach average savings by age in the UK is ‘saving before spending’. To get a substantial average savings by age 60 in the UK, you put money into savings immediately after payday and spend the remaining amount accordingly. Current technology also means people can automate the saving process in its entirety. Various smartphone apps analyse individuals’ income and spending habits, decide on the appropriate amount of savings, and deduct the decided amount automatically every month.

Another smart way to save and have adequate average savings by age in the UK at 60 is to make savings as secure as possible while also making them relatively inaccessible so that you don’t dip into them as soon as you fall short of money or give in to make an impulse purchase. Regardless of what the savings average in the UK is, it’s important to create an easy-access “rainy day” savings account so your retirement savings are left intact to allow compound interest to work its magic.

The role of pensions and retirement funds in UK savings

The role of pensions and retirement funds is obviously to support you when you stop working, but it has another implication, too – it supports the growth of the UK economy.

Following the upcoming general election and a challenging economic outlook, the PLSA has promised to develop its recommendations on pensions and retirement funds further to ensure the government makes informed decisions regarding the industry, which is worth £2.5 trillion, while protecting the interests of people saving into occupational pension funds.

But while long-term investing is recommended, it’s not everyone’s cup of tea.

Moneyfarm Liquidity+ Investing

Moneyfarm has launched Liquidity+, a fresh investment alternative promising a gross annualised yield currently exceeding 5.2%. It comes with a conservative risk profile and straightforward, competitive costs. More than just a low-risk asset containing bonds, CDs, and commercial paper, it’s a smart strategy for short-term financial objectives.

Benefiting from the uptick in yields due to recent rate increases, it facilitates a customised market entry strategy. A fund with an annual yield of over 5.2% diminishes risk, amplifying the significance of liquidity through a thoughtfully constructed solution. Liquidity+ has the potential to enhance the average savings of UK residents, providing a robust alternative to traditional savings methods.

Crafted for a duration of up to 2 years, Liquidity+ offers versatility, enabling immediate fund exits or transfers of funds to another portfolio. Our asset allocation specialists choose the finest money market funds for Liquidity+ and keep a close eye on both performance and risk, initiating necessary modifications. Support is available to ascertain Liquidity+’s position in a portfolio, ensuring it matches your financial targets and risk preferences.

Continuous performance management ensures all investment objectives are seamlessly achieved. With a clear 0.3% management charge (VAT included) + an additional 0.1% for underlying funds, Liquidity+ not only provides transparent and competitive fees but also guarantees precision in every investment handling.

Case Studies of Average Savings by Age in the UK: Successful Personal Savings Strategies

Rather than individual case studies by age, it’s perhaps more relevant to look at overall trends for personal savings strategies, and our portfolio numbers three and four are just two examples.

Between January 2016 and 2024, Moneyfarm’s portfolio number three gained in value by 37.7%, compared to the competitors’ equivalent of just 19.4%. Portfolio number four has performed even better, gaining 49.2% compared to the competitors’ 33.4%. Moneyfarm offers seven portfolios in total. Why not check the performance of each?

FAQ

What is the average amount of savings by age?

The average amount of savings for ages 18 – 24 is £3,636. The average amount of savings for ages 25 – 34 is £3748. The average amount of savings for ages 35 – 44 is £5,714. The average amount of savings for ages 45 – 54 is £9,402. The average amount of savings for ages above 55 is £18,245.

How much should a 25-year-old have in his savings?

Whatever the average savings by Age in the UK for a 25-year-old, they should have at least £20,400 in savings and should allocate at least 10% of their income to their savings.

How much savings do most 30-year-olds have?

Most 30-year-olds in the UK have between £3,544 and £5,995 in savings.