Savers are putting away the biggest amount since the quarterly survey began in 2004. Credit: Lynne Cameron/PA Wire/Press Association Images
Britons are saving more than ever before, according to new findings.
Treasury-backed savings body NS&I found that savers are putting 8% or £104 of their income aside each month - the first time the sum has broken the £100 barrier.
People aged 25 to 34 are putting aside just over 9% of their incomes each month - or £125 - the highest average figure recorded for this group since 2010.
John Prout, NS&I retail customer director, said: "The research suggests that most age groups in Britain are saving more and this corresponds with an increased use of savings goals from last summer, which can only be an encouraging sign for the future."
Greater flexibility may be needed in pension saving, the head of investment propositions at Scottish Widows has said in response to a new study that shows that the next generation may have to start saving at 25 years old to retire by their 70s. Iain McGowan said:
Offering more flexibility that combines the accessibility of an Isa with the tax benefits of a pension could help future generations face up to the twin challenge of saving for short-term financial hurdles like a deposit for a mortgage or a wedding while at the same time setting aside enough for retirement.
– Iain McGowan, head of investment propositions at Scottish Widows
In the future, older workers - especially in the professional and business services sector - are likely to stay working longer into their 70s, but the nature of this work will become more flexible and probably more part-time.
Workers in manual or vocational careers are also likely to look to extend their working lives by undertaking a less strenuous, more part-time role.
The next generation face being in their 50s before they have paid off their student loans and in their 60s before they are mortgage free, research has shown today.
The Scottish Widows study argued that rising life expectancies, combined with people being saddled with large debts earlier in life, mean that today's children should start saving for their retirement at the age of 25 if they want to enjoy a comfortable old age.
Economist Steve Lucas argued that financial pressures from university and housing costs will mean that the next generation will only be able to afford smaller pension contributions, meaning they need to start saving from around 25 years old to prepare for 30 years of retirement.
A fifth of households said they have no emergency cash while another 12 per cent said they have less than £250 for a rainy day.
It is generally recommended to build up a minimum of three months take-home pay as a "salary cushion", typically £5,756.
Some 28 per cent of those who took part in the survey said they would be unable to cover rent or mortgage payments if they unexpectedly lost their income.
One in 10 said they would be forced to rely on a credit card, personal loan or an overdraft.
Families have been hit by soaring transport and childcare costs, leaving them with a "monumental" task of trying to earn enough to get by. Daybreak's ITV Carla Eberhardt reports.
Twenty-one detailed focus groups with ordinary people from different kinds of household (such as families with children, pensioners and single people) had detailed discussions about the necessary elements of a household budget for each family type.
Families should have an adequate diet and meet basic needs Credit: Julien Behal/PA Wire
Experts looked at these budgets to ensure that they provided an adequate diet and met basic needs like keeping a home warm. On this basis the weekly minimum budget:
• For a couple with two children is £454.52 (benefits provide 60% of this amount)
• For a pensioner couple is £231.48, provided entirely by Pension Credit
• For a lone parent with one child is £275.59 (benefits provide 60% of this amount)
• For a single working-age person is £192.59 (benefits provide 40% of this amount)
Hourly wages needed for a minimum income standard: £8.38 for a single person, £9.39 for a couple with two children and £12.20 for a lone parent with one child.
Soaring childcare and transport costs 'affecting families'
Childcare: minimum costs have risen by nearly a third. In 2008, child minders outside London charged on average £2.70 an hour; now they charge £3.50. Childcare is families single biggest weekly outgoing.
Transport: bus travel has doubled in price since the late 1990s which, combined with cuts to public transport, means families with children now deem a car as an essential for the first time.
Tax credits: cuts to tax credits have increased earning requirements substantially, more than cancelling out the benefit of higher income tax thresholds.
