UK at bottom of saving league

13 April 2012

BRITONS save half as much as other people in Europe and are more likely to spend any spare cash they have on going out, research showed today.

British households have an average income of £28,927, only slightly less than the French at £29,416 and more than the Germans at £23,396, according to friendly society Liverpool Victoria.

But the group, which looked at the saving and spending habits of people in the UK, France, Germany, US and Australia, found that people in the UK save just 5.5% of their income or £132 a month.

This is half the 11% or £272 a month the French set aside and nearly half the 10% of their income that Germans save, although this is still better than the 2.5% saved by those in the US.

At the same time, just 13% of people in the UK are saving towards their retirement, compared with 19% of people in Germany and 16% in the US.

Instead, Britons are more likely to spend their money socialising, with 15% admitting they blow any cash they have left over after meeting their bills and other outgoings having fun, compared with 8% of Germans and 9% of people in France and Australia.

Overall Britons spend an average of 5.8% of their post-tax income on alcohol and eating out.

People in the UK are also more likely to spend money on treats and luxuries, with 16% doing so compared with 5% in France.

At the same time, Britons are far more likely to borrow money than other nationalities. The average British household now owes 130% of their annual income in secured and unsecured debt, compared with 112% among people in the US and Germany, while France is the least indebted of the countries looked at, with people there borrowing just 82% of their annual income.

Germans are the most likely to save up for expensive purchases, such as a car or holiday, with 24% putting money aside for special purchases, compared with 18% in the UK.

Nigel Snell, head of external affairs at Liverpool Victoria, said: 'The research shows that the borrow and spend tendency is well entrenched in the UK.

'However, what people overlook is that you don't have to save that much of your income each month for it to make a big difference in the long term.'

TNS questioned between 500 and 1,000 people in the UK, France, Germany, the US and Australia.

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