Older people least willing to give up luxuries

Younger people happiest to ditch nights out and holidays in order to boost savings.

Older people are least willing to give up luxuries in order to save, according to new research from HSBC.

The study surveyed people on whether they were willing to ditch things like takeaways, nights out, gym memberships, online subscriptions, new clothes and holidays in order to boost their savings.

Younger people (those aged between 18 and 24) were the happiest to forego treats. They led the way with 56% happy to ditch nights out, 53% prepared to give up eating out, 46% ready to drop spending on new clothes and 29% content to give up holidays. Just 4% said they were unwilling to give up any of the luxuries listed.

By contrast, those aged over 56 were the least willing to drop their spending. Just 48% would consider giving up nights out, 33% would drop eating out, 28% would cut back on new clothes and a paltry 13% would drop holidays. Almost one in five (18%) were unwilling to drop any luxuries at all in order to save more.

Disposable incomes

Perhaps part of that reticence to cut back comes from the fact that older people enjoy a higher disposable income today than they did just after the financial crisis.

HSBC looked at average earnings data from the Office of National Statistics and compared it with average essential weekly spending on food, housing, fuel, power and transport to come up with the average monthly disposable income for each age group.

The data shows that while younger generations are struggling with almost £200 less a month, over 50s are enjoying marginally higher spending money compared with six years ago.

Saving for sunshine

The most popular savings goal among the over-30s (29%) was a holiday, with 20% of people aiming to pay for home improvements. Unsurprisingly, the bulk of under 30s who are tucking money away each month are saving up a deposit for a house.

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Saving in the wrong places

While the good news is that there is an appetite for saving, the bad news is most of us aren’t putting that money in the right place. More than half (53%) of us choose to save into an instant access savings account, despite the fact these accounts tend to offer the lowest interest rates. Only 43% of us are saving into ISAs.

To find the best home for your money, check out Where to earn most interest on your cash.

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