Survey reveals that UK savings goals are increasingly short term, finds Stuart Stone
New research into the personas that make up the UK’s saving psyche has revealed that nearly half (42%) of Brits are more concerned with living in the moment than long term savings.
‘The Saving Psyche of the UK’, a survey of almost 2,000 workers published by Willis Towers Watson in partnership with Nottingham University Business School, revealed that over a third of Brits (35%) would rather have a good standard of living today rather than save for retirement, and that 55% focus on saving money for holidays versus 47% who put money aside for retirement.
Jo Kite, managing director of LifeSight UK, Willis Towers Watson’s master trust, says: “There’s no overriding reason why people save or don’t save. Each individual has specific characteristics, traits and behaviours that are common to a particular persona.”
The report revealed six key saving persona types:
- Apathetic savers lack knowledge about financial decisions and have average to low financial understanding.
- Suburban savers have a strong tendency towards financial security, a solid knowledge of financial services, and shop around for the best deal.
- Financial worriers fret about finance and agonise over their decisions. They are more likely to spend much of their money on living expenses.
- Short term savers see saving for holidays and short term emergencies as their top motivations. They worry about their financial future but need to be steered into effective decisions.
- You only live once (YOLO) tend to be younger, materialistic, and living in the moment. Despite this, saving is still important to them but they’re less likely to be directed to retirement planning.
- Risk takers never experience debt or financial problems, are good at savings, and balance living for now with taking care of their future.
Kite adds: “The personalities identified in our research can offer guidance to help businesses enhance employee confidence when making financial decisions and deliver improved financial outcomes. Tailoring saving offerings, simple choice frameworks and communication to employees is key.”
James Devlin, Professor of financial decision making at the Centre for Risk, Banking and Financial Services at Nottingham University Business School comments: “There are a lot of aspects of behavioural economics which could help the pensions industry engage with savers more effectively. A “one size fits all” approach is unlikely to be successful.”