The Government is constantly trying to get the British public to save more, but it doesn't seem to be working.
The ninth annual report for the Department for Work and Pensions showed that 56% of households in the UK have savings of less than £1,500 or none at all. 69% of households receive at least one form of State benefit.
The survey showed that all but 2% of households had some form of account but that 88% of people only held a current account.
Our View
Everyone should save at least a small amount on a regular basis, just in case of emergencies. However, the State system and the way benefits are paid do not encourage this.
The Government needs to reassess the way benefits are paid and people that do save, no matter how much, should be rewarded for doing so. Let's face it, if people saved more there would be less reliance on State benefits and we would have a better State system.
The Government seems intent on penalising savers by reducing tax allowances and this does not inspire confidence. If there is no incentive to save, people will not do so.
Learn more about savings in the Savings Adviser.com.
Learn more about pensions in the Pensions Adviser.com.