Londoners saving less for a rainy day
Londoners saving less for a rainy day
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Thursday, 23, Feb 2006 12:59
Londoners may earn the highest salaries in the UK, but new research shows that they are saving a smaller proportion of their income than those living elsewhere in the country.
According to a study by building society Halifax, Londoners put aside just 23 per cent of their monthly earnings, the smallest proportion in the UK, with nine of the ten areas with the lowest savings-to-earnings balances located in the capital.
Nevertheless, while Londoners may be putting aside a smaller proportion of their income, Britons living in the capital and southern England are the UK's biggest savers in terms of total amounts, with 19 of the 20 local authorities with the highest average saving balances located in East Anglia, London and the south-east.
Peter Jackson, head of savings at Halifax, warned that Londoners were risking their financial futures, especially given the warnings of inadequate state pension provisions.
"There are wide variations in saving behaviour across the country with Londoners saving a significantly smaller proportion of their income than elsewhere in the country," Mr Jackson said.
"The recent pensions commission report emphasises the importance that people need to attach to planning to ensure that they have sufficient income in retirement. Savings play a key part in that planning process."
Interestingly, despite having one of the highest average saving balance levels and being one of the wealthiest areas in the country, the London borough of Kensington and Chelsea has the lowest saving levels in proportion to local earnings, with residents putting aside just 12 per cent of their income.
The poorer London borough of Hackney has the second lowest proportional saving levels (14 per cent) as well as the lowest actual average saving balances in the country, with the average resident having just £3,847 in savings.
By contrast, residents of Ceredigion in Wales are the UK's most diligent savers, putting aside 65 per cent of their incomes to amass average saving balances of £9,805.
Across the country as whole, the study found that savers put aside an average of between 31 and 35 per cent of their annual gross earnings.
Researchers also found wide age and gender variations, with older people having much larger savings balances than young adults.
Men were shown to have marginally larger savings than women, with average balances of £7,274 compared to average female savings of £7,184.
However, women were shown to save a much larger proportion of their annual incomes, putting aside 42 per cent of their earnings, with men putting aside just 24 per cent.
Earlier this month, the Building Societies Association reported that total saving levels in January rose by £212 million, the largest monthly increase for almost five years.