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Putting something away for a rainy day is falling out of fashion. Priorities have changed, the trend these days is to be saving for something much more substantial.
Metaphors aside, there’s one thing that still rings true when it comes to savings: there’s bound to be a purpose behind all that effort and sacrifice. Whether it’s a holiday or a hardship fund; new car or a new education, there’s a story behind every savings account. Springfords approve of saving, of course we do. It’s just a sensible part of your personal or business strategy.
There are almost as many reasons to save as there are accounts out there, but those reasons are changing. The number one priority, and one that’s become almost compulsory thanks to recent employment legislation, is still pensions. Never mind a blog, there’s a book to be written on that subject - we’re pretty certain there are already lots of books on that subject. The big trend though, and this won’t come as a surprise, is saving for property. If you’re in that under thirty-five age group of so-called millennials, then you’re right in this firing line.
Research was recently commissioned by the Nottingham Building Society, and note that’s a building society - not a pensions provider, which shows that a disproportionate percentage of millennials put property as their top savings priority.
The numbers show that 24% of under-35s name their top savings priority as a deposit for a property, while just 8% said pensions are the main focus of their savings. Now, while it wouldn’t be very good for the building society’s business if property wasn’t up there, that 24% is way above the population as a whole, but then again the likelihood of older savers putting away their cash for a house deposit is less likely anyway, If you’re still saving for a first house deposit in your twilight years, perhaps a chat with Springfords about your financial strategy would be a good move.
Also mentioned by Nottingham Building Society, the research comes hard on the heels of comments made by the Bank of England’s Andy Haldane (no spring chicken himself by the way) who said he would rather invest in property than pensions. Whether Andy is scrimping to pull together the deposit on a starter flat within commuting distance of Threadneedle Street, or build a portfolio of started flats, isn’t made clear, but we suspect his savings priorities may be a bit atypical.
While the research also found that, in total, a third of under-35s are saving for their first home or to move home, only 15% of the population as a whole is aiming for that ultimate goal.
What does the changing investment and long term saving landscape mean for you - especially if you are a long way off retirement? If you’re unsure, or if you just want reassurance, Springfords can advise on the tax implications of your savings strategy, and help suggest how better to achieve your property, pension, or just rainy day ambitions.
We can’t be sure of everything, but we can be sure of a rainy day sometime and, ultimately, saving for whatever financial umbrella you need is the best way to make sure you don’t get caught out in the wet.