- 37% feel unable to save as much money as they would like due to the cost of living
- Wales has the highest savings opportunity of all regions, due to low living costs
- Post Office ‘Save More’ Squad: a crack-team of experts to help the UK spend well and save more across food, travel, household bills, home improvements and money management
Despite many finding the process of saving difficult, research by the Centre for Economics & Business Research (Cebr) on behalf of Post Office Money has found the average household could potentially save up to £5,950 a year1. The ‘potential savings opportunity’ is the amount of disposable income2 households have left over after their total expenditure.3
In order to help people realise their personal savings opportunity despite these challenges, Post Office Money has today launched the Spend Well, Save More campaign to help people spend better and boost their household savings. As part of this they have launched the ‘Save More’ Squad4, a team of saving experts who will provide tips and tricks to reduce spending and increase saving across everyday areas including food, home, travel, bargain-hunting and money management.
Find your potential savings opportunity
Despite a potential savings opportunity of nearly £6,000 for households and £3,200 for UK adults, research from the Money Charity recently found the overall amount of households with no savings has risen to almost 10 million, with a further 3.26 million households with savings under £1,5005.
The net additional amount that UK adults save has taken a hit in recent years; falling from £86billion in 2016 to £47 billion in 2018, according to official data. This is at least in part due to inflation averaging at 2.6%6 in 2017, while annual wage growth has averaged 2.3% in the same year, meaning that goods and services have become more expensive while incomes have not increased at the same rate, leaving many households with less available to save. This is likely why two out of five UK adults (37%) have felt that cost of living challenges have left them unable to save as much as they would like. Other barriers to saving included unexpected expenses around the home (18%) and people having to prioritise paying off existing debts (17%).
However, the outlook looks set to improve in the future as the potential savings opportunity of UK households is expected to increase to £6,170 by 2021; as incomes are expected to grow over the next three years, resulting in a slight increase in money available to save.
Finding new ways to spend well
UK households spend £395 per week and individual adults spend £213 on average, across housing; transport; leisure; clothing, footwear and homeware; food and household energy7. The two biggest outgoings are housing (£98 per week) and transport (£80 per week).
Clothing, footwear and homeware is the category with the biggest opportunity to save, with frugal households spending 93% less than the average. This demonstrates that clothing, footwear and homeware can be a key area to economise the household budget; particularly, through smart shopping and DIY hacks. However, 40% of adults admitted to taking no steps to actively save money across key spending areas in the last year – with the least attention paid to saving money on personal finances (56%).
|Average weekly household expenditure|
|Housing||£98 per week|
|Transport||£80 per week|
|Leisure||£73 per week|
|Clothing, footwear and homeware||£64 per week|
|Food||£58 per week|
|Household energy||£22 per week|
The regional savings opportunity
Wales currently has the highest savings opportunity (£8,360). This is mainly due to the low average expenditure level amongst Welsh households caused by low cost of living – for example the average house price in Wales was £161,500 in November 2018, compared to an average of £247,000 across England. Meanwhile, households in Northern Ireland and South West England have the lowest potential levels of saving, £2,720 and £1,720 respectively, due to relatively low incomes in these areas.
When it comes to spending levels, Londoners spend the most of all regions in the UK, particularly in areas such as housing, where they spend an average of £158 per week, due to high house prices and rent costs. Furthermore, the South East spend the most on commuting, at £98 per week on average, due to the proximity to London and the opportunity to travel into the capital for work. Households in the South East also spend the most on leisure, clothing, footwear and homeware, and food, at £86, £83 and £63 respectively due to prices being higher than the national average, contributing to higher spending amounts.
Introducing the Save More Squad
In order to get the UK saving more, Post Office Money has launched the ‘Save More’ Squad – a crack-team of saving experts with different specialist areas, who will provide helpful advice, tips and tricks to encourage people to spend in a conscious way, along with some of the UK public’s favourite methods of cost-cutting:
Our food expert, Jack Monroe, the Bootstrap Cook is a writer, journalist and campaigner who began to blog about cooking on a budget when she found herself struggling to feed her family. Jack’s top tip to spend well on food is: “Do some basic meal prep – not only will it help you stretch ingredients it also helps speed up making dinner. I chop onions, veg, and defrost frozen spinach on Sunday evenings and store in containers in the fridge. It makes adding veg to dinners quick and easy.”
To be more economical with food spending in the last year, UK adults have avoided eating out (25%) and started making their own packed lunches (22%). Supermarket hacks are also great money-savers, with people switching to supermarket own brands or economy ranges (34%), making lists to avoid over-spending (28%) and purchasing their groceries from the discount aisle (26%).
Our travel expert, Monica Stott, The Travel Hack blogs about weekend breaks and affordable adventures, focused on getting five-star glamour for cheaper. Monica’s top tip for saving money on travelling is: “Buy tickets in advance – online prices will can be cheaper just be sure to look at reviews, so you are purchasing from a genuine vendor; you can also sometimes get skip the queue tickets for the same price online.”
To save money on travel and holidays, UK adults advised choosing to holiday out of season (20%), picking their holiday destinations based on price available deals (18%), searching online for the cheapest ways to buy foreign currency (15%), opting for a self-catering options (13%) and opting for hand-luggage only flights (11%).
Household bills and bargain-hunting
Our bills and bargains expert, Ricky Willis, Skint Dad launched his money-saving blog to help people do more with their family for less. Ricky’s top tip for saving money on family days out is: “Get a membership card or season ticket for local attractions – if you make regular visits, you’re likely to save money.”
UK adults reduced their monthly bills by trying to reduce their household electric and gas use (39%), and even taking the steps to cancel certain entertainment packages (12%). Other popular ways of reducing household bills is shopping around for cheaper alternatives, with 22% switching gas or electricity supplier or hunting for a more competitive broadband package or provider (13%).
Clothing & Homeware
Our homes expert, Kimberley Duran, Swoon Worthy specialises in design and décor DIYs to make a home your own. Kimberley’s top tip for saving money around the home is: “Consider simple upholstery projects like fitting a new seat cushion to a chair rather than spending money on a whole new piece of furniture.”
Meanwhile, UK families are trying to be frugal with their household spending by using coupons and discount vouchers (34%), purchasing less clothing (30%), buying items from discount stores (25%), using cashback websites (18%) and repairing faulty items rather than replacing it (15%).
Once you’ve saved your money, you need to know what to do with it. Our personal finance expert is blogger and journalist Iona Bain, Young Money; the youngest governor of the prestigious Pensions Policy Institute. Iona’s top tip for making the most of your money is: “Keep a money diary – it will help you keep track of any money you do retain through cost-cutting exercises.”
UK adults are already taking some steps to better manage their money, with some looking for a more competitive insurance deal (21%), changing their savings or current account to ensure they get access to a better rate (12%) or benefit from benefits associated with these accounts (7%). Savers can also benefit from putting their credit in order, including, reducing their credit balance to reduce interest payments (10%) or switching credit card providers to benefit from 0% interest deals (9%).
Ross Hunter continued: “Through the Post Office ‘Save More’ Squad, we hope to give challenged savers practical tips and advice on the various ways they can save, by spending well in their day-to-day life and without having to make unreasonable sacrifices.”
To follow the Post Office Save More Squad and begin to realise your savings opportunity visit www.postoffice.co.uk/savings/spend-well-save-more.
If you would like to speak to a member of the Save More Squad, please get in touch.
1 Post Office Money commissioned the Centre of Economics and Business Research (CEBR) to create the ‘Spend Well to Save More’ report.
Opinium Research carried out an online survey of 2,011 UK adults over 18 years old from 22nd – 25th January 2019
2 Income after tax
3 Cebr used data on income and expenditure from the Living Costs and Food Survey, which can be split into different household types. Cebr then used internal models of household income and expenditure to forecast the potential savings of households until 2021.
5 Money Stats 2019, The Money Charity: https://themoneycharity.org.uk/money-stats-almost-10m-with-no-savings/
6 Measured by the Consumer Prices Index including a measure of owner occupiers' housing costs (OOH)
7Spending categories defined:
|Housing||Includes rent, mortgage payments, maintenance costs, council tax, water bills and other regular housing payments|
|Food||All household spending on food and non-alcoholic beverages|
|Household energy||Gas and electricity payments|
|Leisure||Expenditure on leisure activities inside and outside the home. This includes purchases of TVs and computers, subscriptions including TV licence, holiday packages (excluding transport costs), sports equipment, books and social events and gatherings|
|Transport||This includes purchase of transport vehicles, petrol and diesel, bus travel, rail travel, taxi expenditure, air fares, parking costs|
|Clothing, footwear and homeware||Includes all clothing, footwear and homeware items such as shirts, shoes, furnishings, household equipment and carpets.|
Notes to Editors:
For more information, please contact:
Lily Cunningham, Post Office
0207 294 3638 / 0207 294 3643
About Post Office Money
Post Office Money, launched in January 2015, brings together all of Post Office’s multi-award-winning financial products under one umbrella and seeks to better respond to ever changing customer needs, making sure the Post Office matters even more tomorrow than it does today. Post Office Money is available in branch, over the phone or online.
Bank of Ireland has supported customers in the UK for many decades and provides financial services products to Post Office Money customers.
Winner of What Mortgage award for Best Variable Lender 2017.
About the Post Office
About Post Office: Post Office Limited has an unrivalled national network of over 11,500 branches across the UK, more than all the high street banks combined, and sits at the heart of many communities across the country.
It provides around 170 different services and products spanning financial services including savings, insurance, loans, mortgages and credit cards. Post Office also offers Government services, telephony, foreign currency, travel insurance and mail services.
99.7 of people live within three miles of their nearest Post Office outlet. For many rural communities the Post Office is the only retail outlet. Post Offices remain highly valued and trusted and are the focal point for many communities. For more information, visit www.postoffice.co.uk
About Post Office:
- With 11,500 branches, the Post Office is among the larger retail networks in the UK.
- 97% of Post Office branches are run with retail partners on an agency or franchise basis.
- The Post Office provides services central to peoples’ everyday lives; 99.7% of the population lives within 3 miles of a Post Office.
- We offer the UK’s largest fee free cash withdrawal network through our 11,500 branches and an additional 2,500 cash machines and 99 per cent of UK bank customers can access their accounts at the Post Office.
- We sell 170 different products and services spanning financial services including savings, insurance, loans, mortgages and credit cards; Government services; telephony; foreign currency; travel insurance and mail services.
- Post Offices branches remain highly valued and trusted, and are the focal point of many communities. For more information; visit www.postoffice.co.uk and to find out about a Post Office business opportunities; visit www.runapostoffice.co.uk