For generations, the advice has been simple: get paid, put aside a portion of your salary, and build your financial safety net. But new insights show this isn’t the reality for most households in the UK today.
Despite the assumption that saving is a natural part of monthly budgeting, a recent study by Hodge Bank shows that a fifth of Brits save nothing each month from their salaries.
Christie Cook, managing director of retail at Hodge states that the data could indicate the difficulty of saving against the current cost of living.
“For decades, the idea of saving straight from your monthly pay has been seen as the cornerstone of good money management. The assumption is that people get paid, put a little aside, and steadily build financial security. But that narrative doesn’t reflect the reality most households face today.
Rising living costs, soaring rents and mortgages, and the demands of everyday spending mean that for many households, payday has become less about saving and more about survival.”
Coinciding with this, the data collected by Hodge also reports that a third of people have not been able to pay for an unexpected cost when it’s arisen.
“For decades, the idea of saving straight from your salary has been seen as the cornerstone of good money management. But the truth is that for many people, there simply isn’t anything left to save once the essentials are covered.
Even among those with good jobs and steady incomes, the environment makes it incredibly difficult. People aren’t unwilling to save, they’re unable to.”
The findings from Hodge also demonstrate a domino effect that comes with not being able to save a portion of a monthly salary.
“When people can’t cover an unexpected cost, it often starts a domino effect, such as dipping into credit, delaying other bills, or deferring important financial decisions.
Without a savings buffer, one small emergency can escalate into long-term debt or financial stress. What’s striking is that this isn’t confined to lower earners; even high-income households can find themselves in this position if they’re servicing large mortgages or facing high living costs.
It highlights how urgently we need to rethink how we measure financial resilience, and why flexibility in lending is so important.”
The exclusive data from Hodge indicates an extremely insightful change towards savings becoming more of a luxury for those that can afford to put money away than a basic financial necessity.
“For a long time, the idea of an ‘emergency fund’ was seen as basic financial advice. However, we’re witnessing a change towards it feeling like a luxury rather than a necessity. If your entire salary is accounted for by housing, transport, food and childcare, there’s nothing left to put aside for a rainy day.
That gap between financial advice and financial reality leaves many people feeling anxious and excluded.”
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Notes to Editors:
About Hodge:
For more than 50 years, Hodge has been a trusted provider of financial services across the UK. From helping individuals save and purchase homes to offering businesses tailored lending solutions, Hodge has continually demonstrated its commitment to enhancing financial well-being.
Media Contact:
Emily Leyshon
Liberty Marketing
Email: [email protected]