Households that save ‘less likely to fall behind with bills’

Saving just a few pounds each month could make a big difference to your financial resilience, new research has found.

According to the Building Societies Association (BSA), households that regularly save even small amounts are 70% less likely to fall behind with their bills than those who don’t.

And if you have between £200 and £499 in savings, you’re much less likely to face financial hardship (8%) than those with less (24%).

Build a savings habit

The BSA is now urging people to try to get into a habit of saving, so they’re ready for possible financial shocks. 

“Building a financial buffer is one of the best protections against life’s ups and downs,” said Andrew Gall, the BSA’s head of savings and economics.

“Even small, regular savings, such as £10 a month, will build resilience over time and improve people’s wellbeing.”

How much should I have saved?

The BSA points out that one month’s income provides strong protection, reducing the odds of falling behind with bills by almost 75%.

However, it stressed that this target shouldn’t be seen as a minimum requirement, particularly for households feeling the pressure of rising prices.

That’s why it’s keen to focus on getting into the habit of saving, rather than focusing on a specific amount.

“Setting a goal that is realistic and achievable for an individual’s personal circumstances is crucial for success,” the BSA added.

How can I start saving when money is tight?

If you’re struggling to keep up your regular expenses, from your weekly shop to your rent or mortgage, then saving might not be top of the agenda right now.

But saving even just a few pounds here and there could make a big difference in the long run.

Start small

Don’t give yourself a mountain to climb straight away.

Even £1 a day adds up to £30 a month and can help you get into good habits. 

Automate your saving

Set up a standing order to move a small amount into savings after you get paid, so you don’t even have to think about it.

Set a budget and stick to it

Work out how much money you have coming in and where it’s going, so you can see how much you have left over that you could afford to stay.

Check out our guide to creating a budget to get started.

Set goals

You can stay motivated if you’re feel you’re achieving something.

So give yourself clear targets and track your progress.

Look for the best savings account

If your money is sitting in a current account, remember that they usually offer lower interest rates than savings accounts.

So research the market if you could put your savings in an account that offers better returns.

Find out what extra support you could get

You might be eligible for financial support from the government so find out what you could claim.

You can either give us a ring and we’ll check for you, or use our free benefits calculator to see what help is available.