Most people like to know how they compare to others, so when it comes to saving money each month, do you put away more or less than the average amount?
Legal & General have surveyed 625 families all with children under the age of 10 for their ‘Nearest and dearest families facing tomorrow’ report. The results make fascinating reading:
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- The majority of people, nearly 58%, save less than £100 per month
- The average amount saved per month is just £50
- Despite this 65% of people think savings are important
The survey shows that despite the relaunch of ISAs (Individual Savings Accounts), many families still struggle to save a meaningful amount each month.
Financial priorities
The research also revealed the main financial priorities for families.
Asked to rank a range of financial products, from savings and pensions to life insurance and funeral cover, the top three most important financial priorities were:
1. Life Cover (66%)
2. Savings (65%)
3. Pension (61%)
The survey also found that 78% of people had considered Life Cover, which begs the question why the other 22% of people, who have young dependent children, have not.
Even more alarmingly, despite it being the top priority, only 49% of people surveyed have actually taken out any form of Life Cover.
Given the low level of monthly savings, it is clear that many families will be left financially stretched should one or both parents die unexpectedly.
Surprisingly the main motivation for taking out Life Cover was not having dependent children, with just 34% of people giving this as a reason. For the majority of people, 51%, the main reason for buying Life Cover was to protect their mortgage.
When asked why they have not taken out Life Cover 42% of people said they couldn’t afford it, whilst 25% felt they were not well informed enough to make the right decisions and 13% didn’t believe it necessary despite having dependent children.
