How much Brits should actually have in their savings, according to their age
In May, Metro published an article that revealed the average amount of savings Brits had in their bank accounts. This was categorised by age, and based on a study by personal finance site, Finder. The results proved somewhat interesting: over half of Brits between 18 and 44 years have less than £1,000 in savings. Meanwhile, over the age of 44, the figure hovers around 35-40% (Picture: Getty Images)
While not everyone can save chunks of money every month - for some, it may be on an ad hoc basis - it's still important to be financially responsible. You never know when you might need to shell out cash for a broken boiler or get four brand new tyres for your car. Saving is also crucial for your future, especially if you want to ensure a comfortable retirement (Picture: Getty Images)
With this in mind, Metro spoke to Dr Nisha Prakash, Financial Management lecturer at the University of East London, to find out how much Brits should actually have in their savings, according to their age. This recommended benchmark should give you an idea of whether you're on the right track, or if you need to re-evaluate your financial habits. However, don't stretch yourself too thin trying to save huge amounts to catch up: saving in whatever capacity you can afford is still good practice (Picture: Getty Images)
How much money should Brits have in their savings?
Before we start, Prakash explains that how much liquid savings (savings account, current account and liquid stocks/bonds) Brits should have depends on many factors (lifestyle, earnings, location, dependencies, etc.), of which age is one. She touches on the worrying £1,000 statistics from earlier, noting that, in addition to maintaining one's standard of living in retirement, consistent savings are required to build an emergency fund of typically three to six months' expenses. (This is a general baseline, and increases with age, as you'll find out) (Picture: Getty Images)
'As the UK economy slows down, Brits must maintain sufficient funds for unpredictable events, including job loss, reduced hours, or increased living expenses,' Prakash says. In terms of the three-to-six-month emergency fund, she explains that the 'golden rule' is to have enough to cover essential expenses for such periods. Meaning rent or mortgage, food, utilities, and insurance coverage. Having said that, Prakash adds that holding too much cash is also a problem due to inflation, as the purchasing power of money keeps going down. Keen to find out the recommended amount of savings you should have based on your age? Keep reading: (Picture: Getty Images)
18-24
This age group should have between £1,000 to £3,000 in savings. Naturally, the higher end of this scale is directed more towards the older people in the category. Prakash says that this amount is a solid emergency fund that can help avoid debt at this time in a person's life (Picture: Getty Images)
25-40
In this group - and the rest from now on - Prakash says that monthly expenses typically stay the same, and don't change much with age. She explains: 'Monthly expenses are between £2200 for rent and £2700 for mortgage, based on a family of four.' In terms of 25-40 year olds, three to six months saved is advised. 'This should cover rent/mortgage, insurance, bills, dependents and groceries in case of job loss,' the expert states.
Rent:• Three months: £6,600• Four months: £8,800• Five months: £11,000• Six months: £13,200
Mortgage:• Three months: £8,100• Four months: £10,800• Five months: £13,500• Six months: £16,200 (Picture: Getty Images)
41-50
During this time of life, a solid six months is expected for financial security. Unfortunately, Prakash says that increased responsibilities and the impact of financial shocks, such as job loss, will be greater. Anything less in your savings account could be detrimental in the event of an emergency.Rent: £13,200Mortgage: £16,200 (Picture: Getty Images)
51-60
For 51 to 60-year-olds, six months to a year is necessary. Prakash says that in addition to the above expenses, it is also important to be prepared for an early retirement or redundancy. Wages also start declining at this point, going from £42,796 between 40 to 49, to £36,036 from 60. From 50 to 59, it's £40,456.
Rent:
• Six months: £13,200
• Seven months: £15,400
• Eight months: £17,600
• Nine months: £19,800
• 10 months: £22,000
• 11 months: £24,200
• 12 months: £26,400
Mortgage:
• Six months: £16,200
• Seven months: £18,900
• Eight months: £21,600
• Nine months: £24,300
• 10 months: £27,000
• 11 months: £29,700
• 12 months: £32,400 (Picture: Getty Images)
60+
12 months of expenses are recommended at age 60 and above. This allows for a smooth transition into retirement. Those still in the workforce will earn, on average, £36,036. However, 94.4% of people aged 75 to 84 years are retired, according to 2023 ONS data. It rises to 95.2% for those 85 and over.
Rent: £26,400
Mortgage: £32,400 (Picture: Getty Images)
5 tips for liquid savings
As well as providing saving recommendations for each age group, Prakash has also shared five tips for liquid savings. These include:
1. Set a clear goal after tracking your monthly expenses; aim to cover at least three to six months of expenses.
2. Open a separate easy-access savings account separate from the current account. This avoids the temptation to spend.
3. Save and then spend - rather than saving what remains after spending. Set a monthly standing order to transfer an amount from your current account to your savings account. Even £50-£100 monthly adds up over time.
4. Treat the savings account as an emergency fund only - not for holidays, sales, etc.
5. Choose high-interest, easy-access savings account options provided by your bank. This will ensure your money grows, and avoids monetary trouble in the event of an emergency (Picture: Getty Images)
