How worthwhile does the UK find saving and investing in 2021?

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How worthwhile is saving and investing your money? Is it more important to you to take a risk in the hopes of earning higher returns, or do you see more value in sticking with a savings account?

These are just a couple of the topics we explored in our new ‘Worth 2021’ research. In August 2021, we partnered with YouGov for the second year in a row to ask more than 8,000 UK adults about what financial habits they find worthwhile.  

This year's research revealed that though interest  rates have been historically low over the past year, and interest in investing is increasing, saving is still the #1 most worthwhile financial behavious for UK adults.

In fact, the survey found that 65% of UK adults say that keeping a certain amount in savings for an emergency fund is the most beneficial financial behaviour.

The generational savings divide

Of the 65% who say saving is the most worthwhile financial behaviour, 53% are from the 18-24-year-old age group (Gen Z). This perhaps surprisingly conservative group of savers show that saving isn’t something that is going out of fashion anytime soon. 

Less surprisingly, Gen Z also show a longer-term mindset with their financial priorities, with 32% saying that helping their children in later life is important (compared to 30% of 35-44 year-olds, and 26% of 45-54-year-olds). 

They are also looking to give back to their families, with 21% saying it was important to look after their parents and relatives compared with just 14% of 25-34-year-olds and 9% of 35-44-year-olds.

When we look at our UK survey population, our top three savings goals are:

saving for a rainy day

paying off our mortgages

retire as soon as possible

The worth of saving

Why might these findings suggest that saving remains so worthwhile? 

Despite living in an era of historically low interest rates, savings still come with many benefits. Easy-access savings accounts can give us instant access to our money and can offer a more reliable rate of return compared to investing accounts. 

The continued popularity of saving may come down to the fact that you can add to your nest egg with one-off or regular payments. And, if it's an instant access account, you can get hold of your money (and its interest) whenever you need it. Plus, it's safe – under the Financial Services Compensation Scheme, if the UK bank or building society you save with goes out of business, you'll get back up to £85,000 of your savings.

Though stashing money in a savings account may not be a fast-track to building your wealth, it can still provide a sense of security and accessibility that many UK adults find worthwhile. 

Stocks to memes – the changing investment landscape

Savings remains on top, but many of us think it’s worth investing our money as well. Our survey indicated that the top two reasons for investing are that it can be a way to reach money goals faster, or a financial advisor recommended it. 

When it comes to where we are investing our money, it appears as though pensions (61%) and stocks and shares ISAs (32%) are the most popular options, especially for the older population. 

When it comes to digital investments – including cryptocurrencies and non-fungible tokens (NTFs) – Gen Z seems to be leading the way. 

12% of 18-24-year-olds in our survey invest in crypto or NTFs, compared to only 2% for the 55+ population. 

And the role of social media in investing is notable – 16% of 18-24-year-olds told us that where they invested was influenced by conversations they'd seen on social media.

Our survey shows that the biggest barrier to investing is a lack of knowledge (34%). And over a quarter (27%) appear to be risk-averse, stating they'd rather put their money in savings instead of investments. 

Again, this reinforces the key finding from the survey that people find safety and security to be more worthwhile than potentially high risk, high reward investments. 

The final word

The biggest conclusion from our survey is that saving is still deemed the most worthwhile financial behaviour despite the historically low-interest environment in which we have found ourselves in during 2021. 

Overall, 67% of respondents believe emergency savings are a priority, 

and only 14% believe investments are a must-have.

When it comes to who thinks investing is worth it, much depends on age and what type of investment you’re talking about. Although the returns can be bigger, you're exposed to market fluctuations, which means the value of your investment can and will go up and down, so you could get back less than you put in. 

Investing also sees the most significant generational divide. Gen Z is more likely to dabble in the new digital investment vehicles (such as cryptocurrencies and NFTs). In contrast, the older generations prefer to stick with the more traditional stocks, shares and ISAs. 

For the past two years, our surveys have been conducted during a time of unprecedented change due to Covid-19. The findings suggest that the global pandemic and environment of uncertainty we’ve been living in has encouraged us to place more value on the security and ‘sure thing’ value of saving. 

That said, people also seem to be placing increasing value on investing – both traditional and non-traditional – as other ways to reach their money goals and potentially speed up their money growth. 

Up next

In this article, we’ve explored what UK adults prioritise when it comes to saving or investing their money.  

As the next part of our 2021 worth and value research, we will be exploring what people consider worthwhile regarding how they spend their money – specifically, the types of goods and services they plan to spend more or less on in the year ahead.

The content in this article is for information only and is not advice. All content in this article was accurate on the date of publication shown above.