Topic overview: savings

• Around half of UK adults save regularly, but many can't cope with small shocks or a loss of income.
• Most people save for a rainy day, but a third of working‑age adults have less than £1,000 in savings.
• Barriers to saving are greatest among young adults and those with low or unstable incomes.
• Saving is shaped by how people see themselves, the pressure of limited resource and their confidence in managing money.
• Even a small amount of regular saving can improve resilience and wellbeing across all income levels.

Having a savings cushion is one of the strongest predictors of financial resilience. Regularly saving is also linked to better wellbeing. Encouraging a habit of saving has the potential to transform people’s lives, both by improving their financial resilience and giving them a sense of control over their financial lives.

Nation of Savers is one of five agendas for change set out in the UK Strategy for Financial Wellbeing 2020-2030. Its goal is to increase the number of working-age ‘struggling’ and ‘squeezed’ people who are saving regularly by two million.

Regular saving and financial resilience tend to increase with age, particularly after 55. When people save, they mainly do so for a general rainy day, with fewer saving for specific events or planned expenses.

Most use savings accounts, which can act as a gateway to ISAs, investments, pensions and greater long-term security.

Saving is closely linked to wellbeing: those with savings report less anxiety, greater resilience, fewer financial difficulties and higher life satisfaction. This is the case even after accounting for income, age, health and marital status.

Saving also has a protective effect by reducing the need to borrow, which prevents hardship, builds resilience and supports longer-term planning. Regular saving, even in small amounts, is especially beneficial for people on low incomes.

Having around £2,000 in savings, or about one month's income, can reduce the risk of later financial difficulty. Feeling financially secure typically requires more (around £10,000), but regular saving still benefits those who can't reach this figure.

After the 2008 recession, falling incomes and low interest rates reduced both the capacity and incentive to save.

Although savings rose briefly during the Covid-19 pandemic, it has since declined again. The ‘struggling’ and  ‘squeezed’ groups identified in the national goal are slightly less likely than average to save regularly.

Many people lack even a small financial buffer. A quarter of adults say they could not easily find £300 for an unexpected bill, and half could not last three months without borrowing if they lost their main income. One in three working-age adults live in households with less than £1,000 in savings, and many more people want to save than actually do.

Barriers to saving are concentrated among:

• people with low or unstable incomes
• renters (especially in social housing)
• people who live alone
• single parents
• people in deprived areas
• some ethnic minority groups
• people with disabilities or mental health conditions.

Young adults (18-24s) are among the least likely to save or feel financially secure. Half of Gen Z (16-27s) are not saving any income over multiple years, largely due to low income or high debts.

While income and life stage matter, behaviours such as budgeting, planning and goal‑setting are stronger predictors of saving regularly. People who save regularly also tend to be more confident in their understanding of pensions and more active in retirement planning.

Saving is also shaped by how people see themselves. When people identify more with spending today than planning ahead, saving is often deprioritised. Limited resources, immediate pressures, low confidence and shame can narrow people’s focus to the present, making saving feel out of reach and discouraging engagement with saving products.

Interventions need to address the psychological and social drivers of saving, alongside people’s financial awareness and skills. This includes helping people manage competing priorities, low confidence, identity and feelings of shame.

Timely, trusted money conversations can also build confidence, reduce anxiety and support better planning. People develop saving habits best through experience, support at key decision points and simple rules of thumb.

Effective products should be flexible, reward the behaviour of saving rather than the amount saved, and be offered at key life moments that matter. Encouraging people to start small and track progress with timely prompts can build confidence and motivation.

Behavioural features such as automation, separate pots, soft compulsion and incentives help people budget, build routines and save. Workplace schemes – especially opt‑out – can boost saving levels, strengthen resilience and wellbeing, and support those most in need.

Sustained change requires long-term, coordinated action. This includes shaping the environment around saving, clarifying saving goals, supporting early habit formation and delivering products through trusted organisations.

These are gaps in the evidence on how to build savings habits through experience and how to normalise trusted money conversations. More research is needed on interventions that shift underlying motivations – such as attention, identity and shame – rather than only triggering short-term behaviour, as well as effective messaging and rules of thumb.

We also lack robust evidence on how to design and deliver effective long-term, multi-partner programmes, including those that will support sustained saving behaviour and avoid unintended consequences. In addition, more work is needed to understand how product design can build both short-term resilience and longer-term capability.

Key sources informing this overview are:

• The role of savings in promoting positive wellbeingOpens in a new window - Evans et al (2024)
• Financial Wellbeing: using behavioural science to improve financial wellbeing in the UKOpens in a new window - Strong et al (2020)
• UK Adult Financial Wellbeing Survey 2021 Nation of Savers Report - Money and Pensions Service (2022)
• MoneyView 2026 - Money and Pensions Service (2026)
• Workplace emergency saving: A landscape review of existing evidenceOpens in a new window - Nest Insight (2021)

You can also see:

• our full list of topic overviews, covering a range of themes related to financial wellbeing 
• our financial wellbeing evidence hub, a database of research and evidence.

This overview has been prepared with reference to a wide range of literature, including an earlier thematic review produced for the Money and Pensions Service.