Saving more money can lead to increased confidence in the economy and one’s household finances.
Individuals who save more are likely to be more amenable to new companies’ offers and tend to shop around more and be more open to taking on investment risk, as evidenced by their higher subscription to stocks & shares Isas.
Squirrels, that is, individuals who save £5,000 per year or more, have more diversified Isa holdings and are smart about building up their credit. Although these people spend a considerable amount on their credit card each month (55% spend £500 or more), a very small percent of them ever pay interest (10%). This compares to 29% of everyone else who regularly or occasionally pay interest on their credit card balance.
People who save more are also more technologically engaged as a greater number of them connect to their bank online or by using their provider’s mobile app.
Debt is clearly weighing down the individuals who do not save much money. Of those who took out a personal loan, 30% of the rest of the population did so to consolidate their debt. Squirrels on the other hand mainly used these loans to buy a car (51%) or for home improvements (23%).
Squirrels are more likely to be female, older and more affluent. They are also more inclined to owning their home outright as opposed to having a mortgage.