Savings stuffed under the sofa

By JO THORNHILL
Updated:

 

NEXT time you're sitting on your sofa at home stick your hand down the back of the cushion - chances are you'll find a few loose coins.

According to a recent study British households are sitting on a £945 million cash pile, made up of small change lying around the home, under seats, in piggy banks, old whisky jars and in drawers.

Mutual insurer, Royal London, which carried out the survey, estimates this cash is equivalent to nearly £40 per household.

The report also reveals that almost half of all adults have not saved or invested any money in the last six months - with women the worst culprits. Of those that don't save 27% say they choose to gamble with their money instead.

'We need to be better educated about how to use money more wisely,' says Professor Steve Worthington at Staffordshire University, commenting on the study.

'People are not aware of the levels at which they should be saving, and do not consider saving to be an essential part of their monthly outgoings,' he adds.

The results are released at a time when financial experts are warning that the savings gap - the difference between the amount being saved and the amount that needs to be saved to secure an adequate pension income - is growing. The Association of British Insurers (ABI) now estimates the gap to be £27 billion in the UK.

'If we cannot change attitudes to money, we are likely to see the savings gap widen and poverty increase,' says Worthington at Staffordshire University.

However the reality of the pensions time bomb could be sinking in. Royal London's survey showed that the recent research by the Pension Policy Institute, which claimed people may have to work until the age of 72 to secure an adequate pension, has had an impact on attitudes to saving.

More than half of those interviewed said they would be more likely to contribute to a pension or look for ways to save more money as a result.

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