HSBC Savings Map of Britain Report 2012

Savings Map of Britain:
A Snapshot of the State of the Nations Savings
February 2012
Contents
Foreword
Executive Summary
1. Britains Savings
2. Regular Savings
3. Savings Trends 2011
11
4. Savings Intentions 2012
13
5. Conclusions
List of Tables & Graphs
Figure 1: Average British Savings Portfolio
Figure 2: Savings Pot by Age Group
Figure 3: Savings Map of Britain
Figure 4: Regular Savings by Age Group
Figure 5: Regular Savings Map of Britain
10
Figure 6: Savings Habits in 2011
11
Figure 7: Savings Habits in 2011 by Age Group
12
Figure 8: Savings Intentions in 2012
13
Figure 9: Savings Intentions by Age Group
14
Figure 10: Reasons for Savings Intention in 2012
16
Figure 11: Reasons for Savings Intentions in 2012 by Age Group
17
Savings Map of Britain I February 2012
Foreword
Britains economy struggled to recover in 2011 and the country is now teetering on the edge of a
double-dip recession, with inflation high above its official target and unemployment rising. Against
this uncertain backdrop, Britons are continuing to feel the acute strain on their finances. This
report reveals how continued economic instability has impacted the savings habits of UK savers. It
uncovers how much the average Briton has in savings, how their portfolio is made up and what their
savings habits have been in 2011, as well as looking at their savings intentions for the coming year.
In 2011, several factors may have affected savings habits in Great Britain:
ff Rising inflation; CPI inflation did not fall below 4.0% in 2011, which put it continually more than
2.0% above the Governments target. It peaked at 5.2% in September.
ff Low interest rates; the Bank of England has held the base rate at 0.5% for 34 consecutive
months. While interest rates on savings products have risen slightly this year, they still remain
significantly lower than in previous years.
ff Rising unemployment; the number of unemployed people is currently at its highest level since
1994 at 2.64 million.
ff Lower disposable income; the latest ONS data shows that earnings were just 1.2% higher in
2011 than in 2010 at a time when annual inflation reached 4.8%, meaning that income is not
rising in line with inflation and instead consumers are 3.6% out of pocket in real terms.
This report from HSBC provides an up to the minute picture of Britains savings and reveals the
disparity in savings habits and intentions between genders, generations and regions.
All figures, unless otherwise stated, are from Opinion Matters, in research undertaken on behalf of
HSBC. The fieldwork was carried out online between 26th November and 9th December 2011, among a
representative sample of 2002 people in the UK over the age of 16.
4
Bruno Genovese,
Head of Savings at HSBC, comments:
2011 was a tough year

for savers given the
financial climate, but it
is positive to see the
substantial effort made by consumers
to save in spite of this. While this
year is also likely to prove a challenge
for British savers, intentions to save
remain high with people aware of the
need to build up a savings cushion
in case of a rainy day or to achieve
their long and short term goals. These
findings suggest that Brits will save
where they can afford to in 2012.
Executive Summary
HSBC, one of the UKs leading savings providers, has conducted research into the state of British savings and found that:ff The average British savings and investments portfolio* is worth 17,875
- 61% of the average gross annual household income.
ff Seven in ten people (71%) have some savings and 29% currently have no
savings.
ff British savers can be divided into three distinct, comparably sized
groups:

Successful savers - Just over a third (35%) boosted their savings

balances in 2011, saving more than they withdrew (25% of the whole
population).
Struggling savers - a third (33%) withdrew more than they paid in to

their savings pot (23% of the whole population).
Static savers - the remaining 32% are neutral, saving as much as they
withdrew or unsure whether their balance has gone up or down (23%
of the whole population).
ff The young were the most likely to save more than they withdrew in
2011. However, the amount saved regularly by the 16-24 age group
(111) was 143 lower than the amount saved regularly by those over
55 (254). This difference in regular savings between the ages has
increased by 64% since 2010.
ff British people have positive intentions for their savings over the next
year, with the majority (60%) of people planning to save more or at least
as much as they did in 2011.
ff The average British savings portfolio was slightly more diverse in 2011
than in 2010.
ff Britons still favour a deposit based savings account with a bank or
building society. Sixty-five per cent of people have a deposit based
account and 46% of the value of the average savings pot is held in this
format. Almost a quarter (23%) have equities and 19% have savings held
in bonds.
ff Generally, men save more than women, and Londoners and those from
the South East save more than any other region.
*Where the terms savings or savings portfolios are mentioned throughout this report, they refer to the various forms of savings and investments that Britons hold.
1 Britains Savings
The average Briton has 17,875 in savings and investments. This is the equivalent of 61% of the
average gross annual household income or just over seven months income. Seven in ten Britons (71%)
have some form of savings or investments.
Figure 1: Make up of the Average

British Savings Portfolio by Value
Brits prefer banks and building societies but are prepared to diversify
British savers continue to prefer to keep their savings in deposit based accounts with a bank or building
society. Sixty-five per cent have this type of account, suggesting that, on the whole, they value the
security of holding their money in a low risk traditional format. However, Brits are willing to diversify to
improve their returns. Almost a quarter (23%) have some form of equity investment such as shares and
19% have savings held in bonds. Just 8% of Britons have savings in alternative asset classes and 7% have
savings offset from their mortgage.
By value, the largest portion (46%) of the mean average savings pot is held in deposit based savings
(see fig 1), with over half (54%) of the portfolio value coming from other forms of savings and
investments. Seventeen per cent is invested in alternative asset classes, a further 17% in bonds and
16% in equities such as company shares. Just four per cent is held in offset savings.
17%
46%
17%
The make up of the mean average savings portfolio in Britain is currently as follows:
f 8,401 deposit based savings
16%
f 2,994 in alternative asset classes

f 2,988 bonds e.g. gilts
f 2,776 equities e.g. stocks & shares ISAs
f 715 offset savings*
Deposit Savings
Offset savings
Equities
Bonds
Alternative asset classes
*Savings that are held in an account linked to a mortgage and offset against the mortgage balance to reduce the mortgage interest paid.
6
4%
Men put away more than women

On average, men have almost 13,000 more than women in their savings pot, with 24,693 saved up
compared to 11,971 for women. In terms of the proportion of their income held in savings, men also
have far more set aside then women. Men have 77% or 9.3 months annual income in savings while
women have just 44%, the equivalent of 5.3 months annual salary. However, the make-up of men and
womens portfolios is relatively similar; more so than in 2010, when women were more risk averse.
Women have slightly more in deposit based accounts than men (49% vs. 46%) with men holding more
in equities than women (18% compared to 12%).
Savings increase with age
The amount held in savings and the savings to income ratio naturally increases with age (see fig 2)
those aged 16-24 have 4,048 in savings (22% annual average income) while those aged 55 and over
have 30,356 in savings (115% average annual income). There is a slight dip in savings to income ratio
for those aged 35 to 44.
Figure 2: Savings Pot by Age Group
Age group
Amount in savings
Savings: Annual Income ratio
No. months annual salary

in savings
16-24
4,048
22%
2.7
25-34
8,103
27%
3.3
35-44
9,087
21%
2.6
45-54
17,305
53%
6.3
55+
30,356
115%
13.8
The South East and the Capital lead the savings charge (see fig 3)
ff People from the South East and Londoners have the highest amount in savings (21,324 and
21,186). However, the highest savings to income ratio is to be found in the South West (76%).
ff People in Yorkshire have the lowest savings of any region (12,126) as well as the lowest savings to
income ratio at 40%.
ff Those in the South West have the most diverse portfolio with 40% in deposit based savings, 22% in
equities, 18% in bonds, 17% in alternative asset classes and 2% offset against mortgages.
ff In comparison those in the North East have spread their money around the least, holding 62% in
deposit based savings accounts, 31% in bonds, 5% in equities, 1% in offset mortgages and 1% in
alternative asset classes.
Figure 3: Savings Map of Britain (% pot by value)
Scotland
UK
Average Savings Pot
17,875
Deposit based
47%
Equities
16%
Bonds
17%
Offset savings
4%
17%
Savings: Income Ratio
61%
Average Savings Pot
20,131
North East
Deposit based
50%
Average Savings Pot
12,712
Equities
16%
Deposit based
62%
Bonds
17%
Equities
5%
Offset savings
4%
Bonds
31%
Alternative asset Classes
13%
Offset savings
1%
71%
1%
47%
North West
Average Savings Pot
16,920
Yorkshire
Deposit based
44%
Average Savings Pot
12,126
Equities
18%
Deposit based
47%
Bonds
19%
Equities
16%
Offset savings
4%
Bonds
21%
Alternative asset Classes
15%
Offset savings
6%
64%
9%
40%
Wales
Midlands
Average Savings Pot
15,651
Average Savings Pot
15,234
East of England
Deposit based
43%
Deposit based
51%
Average Savings Pot
21,324
Equities
22%
Equities
13%
Deposit based
50%
Bonds
11%
Bonds
18%
Equities
14%
Offset savings
0%
Offset savings
4%
Bonds
10%
17%
14%
Offset savings
3%
76%
Saving: Income Ratio
54%
24%
62.5%
London
South West
South East
Average Savings Pot
20,768
Average Savings Pot
21,186
Average Savings Pot
21,324
Deposit based
40%
Deposit based
45%
Deposit based
50%
Equities
22%
Equities
13%
Equities
14%
Bonds
18%
Bonds
15%
Bonds
10%
Offset savings
2%
Offset savings
7%
Offset savings
3%
17%
20%
24%
76%
58%
62.5%
2 Regular Savings
The majority of Britons save, but this is down 12% to 71% from 83% in 2010,
with 29% saying they never save. Twenty eight per cent say they save regularly
while a further 43% say they make ad hoc additions to their savings accounts
throughout the year. Those who do save regularly set aside an average of
237 into their savings account each month compared to 232 in 2010.
Men save more
Almost the same proportion of men (29%) and women (27%) say they save
regularly, as well as making ad hoc additions to their savings pots (45% vs.
43%). However, on average men put aside a much higher amount of money
than women each month; 277 compared to 200. Slightly more women than
men say they never save (30% vs. 26%).
Regional findings (see fig 5)

ff People in the North East are most likely to save regularly (36%) while
those in the South West and Midlands are least likely (24%).
ff The Scots are most likely to make ad hoc additions to their savings (49%)
while those in the North West and North East are least likely (40%).
ff Among regular savers, Londoners and those in the South East make the
highest monthly contribution to their savings pot (338 and 337) while
those in Wales add the smallest monthly amount (166).
ff Over a third (35%) of people in the North West say they never save.
Regular savings through the generations (see fig 4)

Those aged 25-34 are most likely to save regularly (32%) while those aged over
55 are least likely (26%). The 16-24s are most likely to make ad hoc additions to
their savings (50%). For those who do save regularly, those aged over 55 save
the most each month at 254 while those aged 16-24 save the least at 111 a
gap of 143. This gap in regular savings is 64% higher than in 2010 when the
youngest group saved 160, which was 81 less than the over 55s.
Figure 4: Regular Savings by Age Group
Age group
% Save Regularly
Average Regular
Monthly Savings*
% Monthly
Income Saved
16-24
28%
111
7%
25-34
32%
236
10%
35-44
28%
223
6%
45-54
27%
245
9%
55+
26%
254
6%
*Of those who save regularly
Figure 5: Regular Savings Map of Britain 2011
UK
% Who Regularly Save
28%
Scotland
Average Monthly Savings
237
27%
10%
192
% Salary Saved each Month
8%
% Gross Income Saved each Month
North East
36%
173
8%
North West
25%
243
11%
Yorkshire
Midlands
24%
198
% Gross Income Saved each Month
8%
27%
177
7%
East of England
Wales
28%
166
9%
29%
225
10%
South East
South West
24%
169
7%
10 Savings Map of Britain I February 2012
London
30%
338
11%
32%
337
12%
3 Savings Trends in 2011

Trends for investing and withdrawing money suggest that Britons were a little more successful in increasing their overall
savings balance in 2011 than in 2010 (see fig 6). Of those 71% that did save, 35% (the highest proportion) deposited more
than they withdrew into their savings last year compared to 32% in 2010. This 35% is made up of 18% who say they saved a
lot more than they withdrew and 17% who say they invested a little more then they withdrew.
However, the nations savers are divided. A third (33%) say they withdrew more than they invested in 2011; 21% say they
withdrew a lot more than they saved while 12% say they withdrew a little more then they saved. Sixteen per cent were
treading water, saying they took as much out of their savings as they deposited in the first place.
Men were most likely to invest more than they withdrew from savings in 2011, in a reverse on their 2010 savings habits,
when the largest group withdrew more than they invested. Thirty nine per cent of men compared to 32% of women said
they saved more than they withdrew. Women were most likely to withdraw more than they invested (36%).
Figure 6: Savings Habits in 2011
Saved a lot more than withdrew
12%
Saved a little more than withdrew
18%
Saved as much as withdrew

Dont know
Withdrew a lot more than I saved
Withdrew a little more than I saved
21%
17%
16%
16%
Savings Map of Britain I February 2012 11
Families dip into their savings (see fig 7)

The 35-44 year olds, typically the age group with children of school age were the only group that were
more likely to say they withdrew more than they invested than vice versa in 2011 (34% vs. 31%). They were
also the group least likely to save more than they withdrew (31%) whereas those aged 16-24 were the most
likely (41%).
The older people get, the more likely they are to say they withdrew more than they saved, with 36% of the
over 55s saying this compared to 18% of 16-24s. This pattern reflects a reduction of assets in retirement and
a build up of wealth among the younger age groups.
Figure 7: Savings Habits by Age in 2011
30%
I saved a lot more than I withdrew from

my savings pot (25% or more)
Percentage
25%
I saved a little more than I withdrew

from my savings pot (less than 25%)
I saved as much as I withdrew last year
20%
I withdrew a little more from my savings

pot than I invested (less than 25%)
15%
I withdrew a lot more from my savings

pot than I invested (25% or more)
10%
5%
0%
Age 18-24
Age 25-34
Age 35-44
Age Groups
Age 45-54
Age 55+
4 Savings Intentions 2012

Although 29% of people did not save at all in 2011 and a third of those who did struggled to put
in more than they took out, intentions to save in 2012 remain high (see fig 8). Thirty six per cent of
respondents plan to save more in the next 12 months than they did in 2011; 16% say they plan to
save a lot more and 20% will save a little more.
Just under a quarter (24%) say they plan to save the same as they did last year in 2012, while 17%
expect to save less over the next 12 months. In todays uncertain environment 23% cannot say
what they will be able to save at this stage.
Figure 8: Savings Intentions in 2012
I plan to save a lot more
16%
I plan to save a little more

I expect to save a lot less
23%
I expect to save a little less

I plan to save about the same
Dont know
20%
24%
10%
7%
Young savers lose momentum (see fig 9)

Whereas in 2010 the younger generation had the best savings intentions and these diminished
with age, the reverse is now true, possibly as a result of the sustained high cost of living,
frozen salaries, and a rise in part time workers and unemployment. Those aged 16-24 have the
lowest intentions to save with just a fifth (19%) saying they will save more in 2012 compared to
35% of 25 to 34 year olds and 45% of over 55s. Conversely, only a quarter of over 55 year olds
expect to save less in 2012, compared to 56% of 16 to 24 year olds.
Figure 9: Savings Intentions by Age in 2012
35%
30%
I plan to save a lot more than last year

(25% or more)
Percentages
25%
I plan to save a little more than last year

(less than 25%)
20%
I plan to save about the same as I did

last year
15%
I expect to save a little less than last

year (less than 25%)
I expect to save a lot less than last year
(25% or more)
10%
5%
0%
Age 18-24
Age 25-34
Age 35-44
Age Groups
Age 45-54
Age 55+
4.1 Regular Savings Intentions

The outlook for regular savings in 2012 is slightly more volatile than that for 2011. Less than half (45%)
of regular savers expect the amount they put away regularly to stay the same over the next twelve
months and 20% are not sure how much they will be able to save or expect the amount will vary.
However, 22% of regular savers expect the amount they save to increase over the next 12 months
compared to only 15% of those asked last year.
Gender differences
ff Men are more likely than women to increase their regular savings in 2012 (24% vs. 20%) and this
gap has widened since last year.
ff Women are more uncertain than men as to how their savings will change in the next 12 months
(19% vs. 11%).
Generational differences
ff The older age groups are more likely to expect to maintain their regular savings at their current
levels; 55% of over 55s believe this compared to 19% of 16 to 24 year olds.
ff The expectation of increasing the amount saved regularly decreases with age. 38% of 16-24 year
olds expect to increase their regular savings in 2011 compared to 13% of over 55 year olds.
ff However 16-24 year olds are also the most likely to expect their savings to decrease (29%).
Regional differences
ff Of the regions, Yorkshire has the most people planning to increase their regular savings over the
next 12 months. 39% say they will increase the amount the put away each month, compared to just
10% of those in the North East.
ff The North East has the highest proportion of people who expect their regular savings to decrease
over the course of 2012 (23%) while Wales has the lowest proportion at just 4%.
4.2 Reasons for Saving

In terms of what people are saving for, long term goals are now losing out; just over one in ten (12%) intends to save
more in the next year to contribute to their long term goals e.g. retirement or property, compared to one in five last year.
Of those who intend to save more for a variety of reasons, 21% intend to save more to provide a rainy day fund; 16%
intend to save more towards their short term goals such as a car or holiday and just 12% will save for long term goals.
There is also a range of reasons why people are planning to save less over the next 12 months (see fig 10); 16% intend to
save less as they need more money to pay for their everyday living costs, 4% say they plan to save less as interest rates
are currently so low and a further 3% say they intend to save less as they feel they may as well spend it while they have it.
On the whole, men and women plan to save for similar reasons in 2012.
Figure 10: Reasons for Saving Intentions in 2012
I intend to save more to provide a rainy day fund
4%
I intend to save more to contribute towards my longer term

financial goals (e.g. retirement or investing in a second property)
Save Less
16%
21%
I intend to save more to contribute towards my short term

financial goals (e.g. buying a car or for a holiday)
I intend to save less as I may as well spend it now while I have it
I intend to save less as I need more for everyday living costs
I intend to save less as interest rates are so low currently
4%
14%
16%
Save More
All but the young saving for a rainy day

Younger savers, 16-24 year olds, are the only group that have not prioritised saving for a rainy day (see
fig 11), with only 14% planning to set aside money for this reason. Most (34%) are saving for short term
goals instead, followed by longer term financial goals (15%).
The older age groups appear to be more aware of the prevailing financial climate when making their
savings plans, as they are all prioritising saving for a rainy day fund. The over 55s are the most likely to
have reasons to save less next year (28%), while a fifth of 45 to 54 year olds are planning to save less as
they need more money for every day living costs.
Figure 11: Reasons for Savings Intentions in 2012 by Age Group
16 to 24
25 to 34
35 to 44
45 to 54
55+
Save more - Long term

financial goals
15%
19%
13%
14%
11%
Save more - Short term

financial goals
34%
21%
18%
8%
16%
Save more - Rainy day
14%
27%
24%
21%
16%
Save less - Everyday living

costs
6%
11%
16%
20%
17%
Save less - Spend it now
6%
2%
1%
2%
5%
Save less - Low interest

rates
0%
1%
2%
3%
6%
Regional Findings
f People in Yorkshire are the most likely to save for a rainy day, with a quarter prioritising this
contingency fund compared to only 16% of people from the North East.
f Yorkshire is also one of the regions with the highest proportion of people who will be using their
money for everyday living costs rather than saving it (19%) and one of the only regions where more
people are saving for long term rather than short term goals (17% vs. 14%), which suggests that
they are feeling the pinch and realise the importance of saving for a secure future.
f Londoners are the most committed to saving for their long term financial goals (19%), whereas
those in the East are most likely to save for short term goals (21%).
f Those from the South East say they are most likely to save less over the year to meet everyday
living costs (20%), potentially due to rising rents and transport costs.
5 Conclusions
In conclusion, while the current financial and economic climate has driven the majority of Britons to
try to save in 2011, the nation is divided into net positive and net negative savers, as some need the
money for everyday spending.
Of those Britons that do save, just over a third (35%) saved more than they withdrew in 2011, a third
(33%) withdrew more than they invested and just under a third (32%) were neutral, investing as much as
they withdrew. While low risk deposit based savings are most popular, portfolios are more diverse than
in 2010. The largest group of Brits (21%) are saving for a rainy day, with long term goals now losing
out. However, Brits continue to be optimistic about their savings intentions for 2012, with 36% planning
to save more this year.
In terms of the sexes, men have a significantly higher savings to income ratio than women (77% vs.
44%) and were able to invest more into their savings than they withdrew. Looking to 2012, men are
slightly more likely to increase the amount they save than women, whereas a greater proportion of
women are uncertain as to how their savings habits will change over the next twelve months.
The amount held in savings naturally increases with age and younger savers were most likely to
save more than they withdrew in 2011 as they build up their assets. This said, the monthly amount
saved regularly by 16-24 year olds dropped by 49 to 111, possibly as a result of unemployment or
more disposable income being needed for everyday expenses. The high cost of living may also be
responsible for younger savers being less likely to expect to save more in 2012 compared to the older
generation, in a reverse on last year. The 16-24 year olds are the only age group not prioritising a rainy
day fund when saving, putting short term goals first instead.
Across the UK, Londoners and those in the South East have the highest amount in savings and make
the highest monthly contributions to their savings pots, although the highest savings to income ratio
is to be found in the South West at 76%. People in the North East are most likely to save regularly in
contrast to those in the North West, over a third (35%) of who say they never save. People in Yorkshire
are the most likely to save for a rainy day, with a quarter prioritising this contingency fund, whereas
Londoners appear to have a more optimistic outlook and are the most committed to saving for their
long term financial goals (19%).
For further information please contact:

Melissa Jobson I 020 7992 1558 I melissa.jobson@HSBC.com
Louise Weaver / Hugh Murphy I 020 7427 1400 I l.weaver@wriglesworth.com

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Savings Map of Britain:

A Snapshot of the State of the Nations Savings

3. Savings Trends 2011

4. Savings Intentions 2012

Figure 2: Savings Pot by Age Group

Figure 3: Savings Map of Britain

Figure 4: Regular Savings by Age Group

Figure 5: Regular Savings Map of Britain

Figure 6: Savings Habits in 2011

Figure 7: Savings Habits in 2011 by Age Group

Figure 8: Savings Intentions in 2012

Figure 9: Savings Intentions by Age Group

Figure 10: Reasons for Savings Intention in 2012

Figure 11: Reasons for Savings Intentions in 2012 by Age Group

Savings Map of Britain I February 2012

Savings Map of Britain I February 2012

2011 was a tough year

Successful savers - Just over a third (35%) boosted their savings

Struggling savers - a third (33%) withdrew more than they paid in to

Figure 1: Make up of the Average

f 2,994 in alternative asset classes

Savings Map of Britain I February 2012

Men put away more than women

Savings: Annual Income ratio

No. months annual salary

Figure 3: Savings Map of Britain (% pot by value)

Alternative asset classes

Savings: Income Ratio

Average Savings Pot

Average Savings Pot

Alternative asset Classes

Savings: Income Ratio

Alternative asset classes

Savings: Income Ratio

Average Savings Pot

Alternative asset Classes

Savings: Income Ratio

Alternative asset classes

Savings: Income Ratio

Average Savings Pot

Average Savings Pot

Average Savings Pot

Alternative asset classes

Alternative asset classes

Savings: Income Ratio

Saving: Income Ratio

Alternative asset classes

Savings: Income Ratio

Average Savings Pot

Average Savings Pot

Average Savings Pot

Alternative asset classes

Alternative asset classes

Alternative asset classes

Savings: Income Ratio

Savings: Income Ratio

Savings: Income Ratio

Savings Map of Britain I February 2012

Regional findings (see fig 5)

Regular savings through the generations (see fig 4)

*Of those who save regularly

Savings Map of Britain I February 2012

Figure 5: Regular Savings Map of Britain 2011