New research from Hodge Bank reveals how UK savings habits are adapting amid continued inflation surges and cost-of-living pressures, with 67% using savings to help cover everyday spending.
A study of 2,000 UK adults by Hodge Bank found while people remain committed to building positive saving habits, they’re increasingly having to reshape how and why they save. Rather than simply building savings for future goals, many are now relying on them as a buffer against the financial pressures of today.
For some savers, the shift is already being felt in everyday life.
A saver’s perspective
Raj, 54, has always been a consistent and disciplined saver. Although he’s now focused on saving for retirement, he’s found he has to adapt when he saves to manage rising living costs.
“Yes, I definitely have to dip in to my savings because everything’s so expensive. It seems to go up on a daily basis. I mean, I’m not sure whether it’s really, true, you know, cost of living and costs or whether it’s just profiteering. But nonetheless, you don’t really have any choice. You just have to go with it.
“I try and save, I’m a bit more pragmatic these days because when I was younger, I was really keen to save quite regularly and quite disciplined about it. But now I’ll just save whenever I can.”
Raj’s experience reflects a wider shift identified in Hodge’s research, with savings increasingly being used alongside regular income to help manage everyday costs.
The savings buffer:
- 67% use savings to help cover everyday spending
- 57% are saving to help manage rising living costs
- 54% say food and everyday expenses are their biggest barrier to saving
- 45% have reduced spending on dining out and socialising
- 42% have cut back on holidays
- 41% continue to save regularly despite ongoing financial pressures.
Despite these pressures, people haven’t stopped saving. More than four in ten (41%) continue to save regularly, demonstrating a commitment to building financial resilience even when circumstances are challenging.
The research also found almost seven in ten have less than £20,000 set aside, the figure previous Hodge Bank research identified as the amount many people believe would help them feel financially secure. While 41.2% of people have less than £2,000 in savings.
From building savings to buffering for everyday living
The changing role of savings isn’t only about covering today’s costs. For some people, it’s also about working out how their money can provide greater stability for the future.
Chis, 66, has always taken a structured approach to his finances. Now, he says his focus has shifted from building savings to understanding how much he’ll need to support him today, as well as in the years ahead.
“Recently, we’ve been building our income and savings to provide an income for now. So, we’re probably going from building to trying to achieve stability. Working out what money we’ve actually got coming in so we can afford to pay the bills in the future.
“You also don’t know how long you’re going to need your savings for. And you don’t know what life changes are going to happen.”
For Chris and many other UK people, savings need to provide both security for the future and the flexibility of whatever life brings in the meantime.
Savings are being asked to do more
The experience of savers like Raj and Chris show us how the traditional role of savings being associated with planning for the future, is very much changing.
People are adapting and being resilient in their approach, despite these extra pressures.
Christie Cook, managing director of retail at Hodge Bank, said:
“For decades, we’ve tended to think about savings as putting away money for the future. What our research shows is that, for many households, this definition is becoming blurred.
“People are still saving, which is great, but as savings are being asked to work harder, ensuring people feel confident and understand the financial decisions they’re making becomes even more important.”
Hodge also asked colleagues in Cardiff if they were dipping into their savings this summer and 59% said yes. Further data to show that the pressures are being played out in everyday life.
Adam French, full-time employee and parent of two young children said:
“I’m finding first-hand how saving can be a balancing act for me and my family. With summer holidays, family events and the rising cost of living, there are times when we’re adding to our savings and times when we need to dip into them.
“I think that’s why savings feel different today. We’re trying to build a safety net while trying to manage everything else life is asking you to pay for.”
More than a savings balance
The findings form part of Hodge’s latest research exploring how savings behaviour and financial confidence are changing across the UK.
Alongside changing savings habits, the research also uncovered differences in financial confidence across generations, with people approaching retirement reporting some of the lowest levels of confidence despite being among the country’s most committed savers.
Together, the findings suggest the challenge facing UK savers isn’t simply putting money aside. It’s balancing today’s financial realities while continuing to build for tomorrow.
