The Student Room Group

Savings so low

I just read that the median UK savings in someones bank account is like £500. What have people been doing with the money?

I mean I keep rent, bills, food to a minimum cost and I don't spend much on leisure and I've managed to save a good few grand in 6 months of working.

I don't go on holiday, I don't smoke or drink much etc.

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Reply 1
You've only just started working. The cost of living will eventually go up for a myriad of reasons as you go.

If you're referring to savings as cash in the bank for a rainy day. I barely have a few grand available. I think for myself and many others with good credit and responsible usage, the ease of access to credit kind of gives some extra headroom should we ever be in trouble. At least to last us until the problem has been sorted out.
Moreover, I'd only keep at most, 10% of my worth in cash. Any uninvested cash provides no returns and is at the mercy of inflation. Therefore I keep my ISA maxed out, equity locked into property and a few index funds for steady growth.

As for people not investing their money, it's simple. They spend more than they earn or too close to that point.

I consider myself quite a heavy spender. In the past 3 months I have spent £600 on new phone, £4000 engagement ring, £4000 on holidays, £75/mo on cable, £300/mo on vehicle upkeep, £100 a week on fuel, £700 monitor for PC, £1000 in gifts, £500 on vehicle tax, £700 vehicle warranty, £210 new tyre, £2500 private license plate, £18000 paying back debts and an absurd amount on a new car. Oh and I regularly eat out and rarely stay in to cook. There's many more things but that's what I can think off the top of my head. A lot of those purchases are occasional, such as holiday (haven't had one in 2 years), replacing a 2year old phone, new car purchase and of course, engagement.
Reply 2
Original post by NX172
You've only just started working. The cost of living will eventually go up for a myriad of reasons as you go.

If you're referring to savings as cash in the bank for a rainy day. I barely have a few grand available. I think for myself and many others with good credit and responsible usage, the ease of access to credit kind of gives some extra headroom should we ever be in trouble. At least to last us until the problem has been sorted out.
Moreover, I'd only keep at most, 10% of my worth in cash. Any uninvested cash provides no returns and is at the mercy of inflation. Therefore I keep my ISA maxed out, equity locked into property and a few index funds for steady growth.

As for people not investing their money, it's simple. They spend more than they earn or too close to that point.

I consider myself quite a heavy spender. In the past 3 months I have spent £600 on new phone, £4000 engagement ring, £4000 on holidays, £75/mo on cable, £300/mo on vehicle upkeep, £100 a week on fuel, £700 monitor for PC, £1000 in gifts, £500 on vehicle tax, £700 vehicle warranty, £210 new tyre, £2500 private license plate, £18000 paying back debts and an absurd amount on a new car. Oh and I regularly eat out and rarely stay in to cook. There's many more things but that's what I can think off the top of my head. A lot of those purchases are occasional, such as holiday (haven't had one in 2 years), replacing a 2year old phone, new car purchase and of course, engagement.


You're in 18 grand of debt? Is this student loan debt or proper bank debt?
They probably just things on credit and end up in loads of debt without thinking. I've got some savings; but the rates are rubbish.
Reply 4
Original post by Tiger Rag
They probably just things on credit and end up in loads of debt without thinking. I've got some savings; but the rates are rubbish.


Well why the hell would someone do that? Spend loads of money which they know they can't pay back?
Original post by Ekans
Well why the hell would someone do that? Spend loads of money which they know they can't pay back?


I used to know someone who did do that. And then he'd whinge that he was poor. :rolleyes:
Reply 6
Original post by Tiger Rag
I used to know someone who did do that. And then he'd whinge that he was poor. :rolleyes:



I can only have limited sympathy for people like that. Idiots. They deserve their assets taken away from them.
Reply 7
Original post by Ekans
You're in 18 grand of debt? Is this student loan debt or proper bank debt?


I was. Happily paid it all off though.
Half of it was personal spendings on a credit card. I shuffle between 0% interest accounts and make minimum payments. Could pay them off at anytime (I earn over 7k a month) but sometimes it's easier to pay for something expensive in small chunks. Especially when it's interest free. Just helps my cashflow timing in being able to pay for something later. Especially when I need to free up cash to pay a tax bill.

The rest on personal loans for my investments, for things such as renovating and refurb. (I'm a part time Property Developer/Landlord).
As for student loans I have roughly 8k left - should be paid off in the next 2 years.
(edited 6 years ago)
Original post by NX172
Could pay them off at anytime (I earn over 7k a month) but sometimes it's easier to pay for something expensive in small chunks. Especially when it's interest free. .


Can I ask where you work and your experience as a software dev to be earning this ? Genuinely curious as a junior developer earning a pretty competitive salary outside of London.
Reply 9
Original post by NX172
I was. Happily paid it all off though.
Half of it was personal spendings on a credit card. I shuffle between 0% interest accounts and make minimum payments. Could pay them off at anytime (I earn over 7k a month) but sometimes it's easier to pay for something expensive in small chunks. Especially when it's interest free. Just helps my cashflow timing in being able to pay for something later. Especially when I need to free up cash to pay a tax bill.

The rest on personal loans for my investments, for things such as renovating and refurb. (I'm a part time Property Developer/Landlord).
As for student loans I have roughly 8k left - should be paid off in the next 2 years.


That's good. Not everyone is on as high salary as you though so they shouldn't be taking these loans out. But if you are earning that much, then you should deserve to spend it on what you want.

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Reply 10
I didn't know people were that poor
I mean I have just over 4k in my savings and i'm still a student and 21 so it is doable but as stated its better to store your money in assets...
Reply 12
Original post by JJTwentyOne
Can I ask where you work and your experience as a software dev to be earning this ? Genuinely curious as a junior developer earning a pretty competitive salary outside of London.

Can't say where exactly I work, but it's for a household name in their London head office. I have around 5 years of experience. However, it only makes up half my earnings. The rest comes from investments. Everyone with a proper office job is on a high salary in London but you need to invest to be able to afford anything out of the norm. i.e, cars, london property, etc.
Original post by NX172
Can't say where exactly I work, but it's for a household name in their London head office. I have around 5 years of experience. However, it only makes up half my earnings. The rest comes from investments. Everyone with a proper office job is on a high salary in London but you need to invest to be able to afford anything out of the norm. i.e, cars, london property, etc.


Ah okay fair enough, I interpreted that as your basic salary from a single job.

Back on thread topic - 23 years old , out of uni for a year with £2k in a bank savings account and another couple in a stocks and shares LISA that I invest into monthly.
Reply 14
Original post by usualsuspects
I didn't know people were that poor


Neither did I. I admit I first suspected when I read people's receipts left on the floor from ATMs. Most people have a few hundred. Would have thought people would have around 10K.

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Original post by Ekans
I just read that the median UK savings in someones bank account is like £500. What have people been doing with the money?


Quite simply; they spend it.

It's all the daily and weekly expenses which add up massively. Takeaways, petrol, coffees, tv, phone etc.

Then people buy the biggest house their mortgage will stretch to and only make the minimum repayments.
Reply 16
Original post by Ezisola
Quite simply; they spend it.

It's all the daily and weekly expenses which add up massively. Takeaways, petrol, coffees, tv, phone etc.

Then people buy the biggest house their mortgage will stretch to and only make the minimum repayments.


I pay those weekly expenses and try to keep it to a minimum and I'm still saving more than they have only working 6 months.

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Reply 17
Original post by Ekans
Neither did I. I admit I first suspected when I read people's receipts left on the floor from ATMs. Most people have a few hundred. Would have thought people would have around 10K.

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Me too. If anything happens they are ruined (an accident of some sort, dentist, whatever). And regardless, it means median wealth is really low, since I don't think people with fivehundred in the bank have thousands investested.
Original post by Ekans
Neither did I. I admit I first suspected when I read people's receipts left on the floor from ATMs. Most people have a few hundred. Would have thought people would have around 10K.

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Why would you keep 10k in a current account?
Reply 19
Original post by Ezisola
Why would you keep 10k in a current account?


Well where would people store it?

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