How household savings have changed in 60 years
THE amount we save has soared over the past 60 years, proving that, in good times and in bad, most Brits try to squirrel away as much as possible.
According to research by Lloyds TSB, the value of our household savings - including pensions, shares and cash - has risen by a massive 464% in real terms over the past 60 years, equivalent to an annual growth rate of 2.9% per year.
Here, we take a look at how our savings habits have changed over the past few decades, as well as the best places to stash your cash in 2012.
How much are we putting away?
Business Cards From Only £10.95 Delivered www.myprint-247.co.ukView details
Our heavyweight cards have FREE UV silk coating, FREE next day delivery & VAT included. Choose from 1000's of pre-designed templates or upload your own artwork. Orders dispatched within 24hrs.
Terms: Visit our site for more products: Business Cards, Compliment Slips, Letterheads, Leaflets, Postcards, Posters & much more. All items are free next day delivery. www.myprint-247.co.uk
Contact: 01858 468192
Valid until: Friday, May 31 2013
Households have saved an average of 6% of their net income since the 1950s, says Lloyds TSB.
Household savings recorded their biggest rise in value in the 1980s, but the worst performing decade for real household savings was the 1970s when there was a 12% fall, due to high inflation eroding the value of our savings.
Women are now the biggest savers, with an average savings balance equivalent to 40% of their gross annual earnings, almost double the 23% proportion of earnings saved by men.
Overall, savings now stand at an average of over £150,000 per household, including pensions, investments and deposit savings, compared with just below £50,000 in 1951 (at today's prices).
However, there is still a big gulf between those who do and don't save. Almost one in three UK households has no savings at all and a further 19% hold savings of less than £1,500.
In these difficult times, it can seem impossible to put anything away, but even a few pounds each month can, over time, result in a sizeable savings nest egg. Here, we look at some of the best homes for your money...
Top savings accounts to kick-start the savings habit
If you've never saved before, then you should start by making the most of your annual individual savings account (ISA) allowance, as you will earn interest tax-free.
You can save up to £5,640 into a cash ISA this tax year, and many accounts can be opened with only a small minimum investment.
For example, "ING Direct's cash ISA requires minimum deposit of just £1, and pays 3.00% annual interest tax-free, guaranteed for a year. And, if you open the account through MoneySupermarket between June 11 and June 27 this year, the bank will also pay in a gift of £10, providing you deposit £500. Remember if you are aiming to pay in your full annual allowance, you will need to subtract the £10 from this so you don't bust your limit.
Alternatively, the " Post Office's Premier Cash ISA pays 3.01% annual interest tax-free, and can be opened with a minimum investment of £100. This rate includes a 1.26% bonus for the first 18 months, so you may want to move your money once this disappears.
Best easy access accounts
As well as making the most of your annual tax-free allowances, all savers should have some money in an easy access account so they can get their hands on it easily in the event of an emergency.
Experts advise trying to build a nest egg equivalent to between three and six months' salary, so that you have a buffer in place if you are unable to work for any reason.
The good news is that there are plenty of accounts available paying at least six times' the current 0.5% Bank of England base rate.
The Post Office's Online Saver Issue 5 account, for example, pays a market-leading 3.17%annual interest before tax, and can be opened with a minimum investment of £1.
This rate includes a 1.52% bonus for the first 12 months, so you may want to move your money at the end of this period.
Similarly, the ING Direct savings account pays a marginally lower 3.15% annual interest before tax, and can again be opened with a minimum investment of £1. This rate includes a much higher bonus of 2.61% for the first 12 months, so it's especially important to move your money once this disappears.
Another option worth considering is Allied Irish Bank's Savings Direct Easy Access Reward Account, which pays 3.00% annual interest before tax.
The rate includes a 1.50% bonus, but this is fixed for five years, so you don't have to keep moving your money around every year. You can open this account with £1, but you can only make four penalty-free withdrawals a year, so it won't suit those who require regular access to their cash.
Fix for the highest returns
Savers who can afford to tie up their money for a year or more will earn the highest returns. However, usually you need a minimum deposit of around £1,000 or more to qualify for most fixed rate accounts, so they may not suit savers with small sums to invest.
Cahoot's market-leading one-year Fixed Rate Bond (Issue 4) requires a hefty £25,000 minimum investment, but in return pays a generous 3.60% annual interest before tax.
Other competitive bonds with lower investment limits include United National Bank's One-Year Fixed Deposit account, paying 3.45% annual interest before tax on a minimum investment of £2,000, and Allied Irish Bank's Savings Direct One Year Fixed Rate bond, paying 3.40% on a minimum investment of £1,000.
If you can afford to tie up your money for longer, then BM Savings is paying 4.00% on its 3 Year Fixed Rate Bond which can be opened with a minimum investment of just £1, while Halifax's 5 Year Fixed Online Saver account pays 4.15% on a minimum investment of £500.
Bear in mind, however, that if you are considering tying up your cash for several years, rates may not seem quite as appealing once interest rates do finally start to go up.
Whichever account you choose, remember that the more you save now, the more secure your financial future will be.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.