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26 Oct 2016

Financial security means having £21,000 in the bank, study finds

A new survey has found that the average person in Britain would only consider themselves financially secure with £21,000 put aside in savings, the Belfast Telegraph reports.

According to research conducted by Nationwide Savings, which spoke to 2,000 people with a savings account, the average amount of cash they needed to feel financially secure was £21,313.

Worryingly, many savers were at least £5,000 short of this number. What´s more, the average female saver had just under £13,000 put away - compared to the average male saver, who had over £20,000.

Women were also more likely to be anxious about their savings; some 44% of women felt concerned about not having enough money put aside, compared with 30% of men.

The researchers also found that low interest rates on traditional savings accounts is making more people invest their cash in other - often riskier - areas. Despite low returns on savings accounts, savers are protected by Financial Services Compensation Scheme (FSCS) when their money is held in UK banks - which offers compensation if their provider goes out of business.

Other than savings accounts, the most popular area to invest money in was property, reported by 14% of savers. This was followed by jewellery and art and antiques, both with 6%. Around one in 50 (2.1%) are even investing in rare comic books.

The age and location of the savers were found to play a role in their savings habits. For example, savers in the South West are more likely to have a rare coin collection, while those in Northern Ireland were more likely to have invested in alcohol, such as wine or whiskey.

Similarly, older savers - those aged 55 and above - were looking into more alternative investment options, with 56% of older savers doing this compared with 27% of 18-24 year olds. Older savers were also more likely to know their savings account´s interest rates.

Copyright M2 Bespoke 2016

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