Why is this so important in the UK?

coins (photo)

This year we have helped over 2.7million of our customers to save over £70 billion of their money to secure a retirement or save for those things important to them in the future. But we realise that this isn't the case for everyone.

2012 has been another tough year for savers. The financial crisis is now dragging on into its fifth year and more and more of our customers are finding it harder and harder to save.

Whilst they realise the importance of saving for the future, in the current economic climate surviving from week to week is the priority for many of them and their families. Those who can save have seen low interest rates continue with banks further reducing the rates they offer to savers.

The stock market has made positive progress despite the headwinds of Europe and the Sovereign Debt crisis, yet many customers have been nervous of seeking higher returns from the stock market following the issues of previous years. Perhaps there is merit in the old adage ‘don’t keep all your eggs in one basket’.

Customers are also worried about losing their jobs as the fragile recovery moves between growth and recession on what seems a quarterly basis. The glorious summer of sport that lifted us all in the third quarter of 2012 seems a long and distant memory.

what we have said about this publicly

As a leading financial services provider we are concerned about the patterns we are seeing and publish a few key pieces of research that follow the state of the wealth of the UK, ‘Deadline to the Breadline’ and ‘Moneymood’.

Press release - 2.5 million households struggling with finances according to latest Legal & General moneymood survey

Press release - household finances show first signs of recovery according to latest Legal & General moneymood survey

Giddy limits - The Bank of Mum and Dad

Mail Online: Still raiding the Bank of Mum and Dad: How a growing number of middle-class 40-somethings are going to their parents for cash

We are continuing to see the population divided between those who can save and those who can’t. Worryingly, with increasing costs of living, wages failing to keep pace and increased taxation we are seeing more and more people fall into the category of people who can’t save.

Deadline to the breadline

Our ‘Deadline to the Breadline’ survey shows that 40% of the population can’t afford to save. This creates further cause for concern when we recently learnt through our ‘Moneymood Survey’ that over 4.5 million households in the UK believe they are living in fuel poverty.

With this background, it’s hardly a surprise to find more and more people are turning to pay day loans. We also understand it’s not just the low earners that are utilising this relatively recent source of borrowing. In fact, according to credit unions a significant percentages of higher rate taxpayers are now using them too.

On top of all this we know that with an ageing population and increased standards of health we are seeing people living longer. Which is great... providing we can afford it of course!

This longer life span means that people are likely to be in retirement for longer. The unfortunate side affect of all of this is more people are likely to need care in their later years.

The government has made it quite clear they will not be able to deal with the time bomb we are facing. So people will have to make their own provision.

So what are we doing to try to tackle these issues?


Income & Housing Wealth inequality


Consumption Culture – UK – low saving rates

Precautionary vs. retirement saving

Living longer


Highly leveraged households

Retirement expectation vs. reality

Costs of long-term care and inadequate long-term savings

Rising education and family start up costs delaying saving to later in life

Sandwich Generation – looking after cost of parents’ care whilst supporting children


Underserved – limited access to financial services

Growth of lone parent households

Unemployment risk

Working post SPA

Financial planning lack of awareness, engagement and knowledge – growth in ‘default’ savers

Slow growth economy and state retrenchment: affordability of saving and debt repayments






Source: Legal & General, ‘The Pressures on UK Consumers’


Our Savings business provides investment and savings products that allow people to plan for the future and for retirement. We know saving isn’t always easy. So we have a range of community projects to help people take the first steps in saving for their future.

As the economic climate continues to challenge all of us financially, more and more consumers are aware of the need to save – while having more calls on their income than ever. As a financial services company we believe it is part of our role to support a cross-generational savings culture and help people at the fringes of our traditional marketplace. Our products are aimed at people who regularly save. But we also need to understand the attitudes of the next generation and guide them into adopting a prudent attitude to savings.


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