Brits are struggling to save by Michael Ossei of uSwitch.com on 20-Mar-2012

The nations piggybanks are suffering, with a fifth of Brits (21%) currently unable to save anything, according to new research from uSwitch.com. Just three in ten people (31%) can be classed as regular savers, saving every month. While a further 32% save as and when they can. The best regular savers are those aged 18 – 34 with over a third (33%) stashing the cash on a regular basis.

The over 55s are the least likely to save, but when they do they are the ones who put aside the most, stashing £258 a month on average. As for the average Brit, half (50%) save less than £150 a month – around 10% of their average monthly income.

But British savers as a whole are missing a trick when it comes to making the most of their money. More than four in ten (44%) of those who manage to save are missing out by saving in to a current account. Most high street banks offer no interest on current accounts – whereas some easy access savings accounts offer as much as 3.1%.

Younger savers are the most likely to be missing out in this way – almost half of 18-34 year olds (48%) have their savings in a current account. They are also the least likely to take advantage of an ISA (50%) – meaning they are missing out on tax-free savings too.

Worryingly, over one in ten Brits (12%) have never reviewed their savings rate, meaning they could be languishing on a low interest rate and could be getting more for their money elsewhere. Almost half (47%) have never switched their ISA to get a better rate.

"In these cash-strapped times, there are often a million reasons not to save but one outstanding reason why you should," says Michael Ossei of uSwitch.com. "Having savings to fall back on could be a lifeline, so it’s vital that savvy consumers find was to cut back and free up some cash to stash."

"If you’ve made the effort to save, it’s also worth making sure your money works as hard as possible – avoid current accounts (unless they have an extremely good credit interest rate) and shop around for the best savings product for you. If you’re prepared to lock your money away, the returns tend to be even greater, offering up to 4.5%. Savers should also make the most of their ISA allowance every year – some ISAs are instant access. Tax-free savings go some way to balancing out low interest rates, but check if your rate includes a bonus. Many savings rates fall dramatically after a year, so read the small print and make a note in your diary to move your money when the rate plummets."

Best and worst savers in the UK

	Best	Worst
Don’t save at all	South West (16%)	Wales (33%)
Save every month	North West (37%)	South West (25%)
How much saved each month	London (£286)	Wales (£120)
Use current account to save	Wales (36%)	London (70%)
Never review savings rates	London (5%)	Wales (27%)
Never switched ISA to get a better rate	London (40%)	Midlands (51%)

For more information visit: www.uSwitch.com

Tweets by @biz_works