They say that you can’t teach an old dog new tricks. Yet, in an age of digital technology and mobile apps, the older generation are still able to teach the young one of the most fundamental financial tricks: saving.
Stats from Halifax’s ISA report shows a striking correlation between age and average ISA savings. The average ISA balance stands at roughly £8,500.
The results show a remarkable contrast in the amounts that different age groups hold in their ISAs. As highlighted in the graph below, there is a near proportional relationship between age-group and the volume of tax-free savings.
- Between 25 and 34, the average is just £3,100.
- Between 35-44, the average is c. £4,800.
- Between 55-66, c. £11,000
- Between 65-74, c. £12,500
- 75 and above, c. £14,100.
There is also, as one might expect, a division by region. The report suggests that average savings are much higher in the South of the UK than in the North.
It is not a perfect correlation, however. The proportion is skewed in favour of the older age brackets. Admirably, it demonstrates that, on average, pensioners still manage to retain solid savings levels despite high food and utility bills.
The low amounts recorded for young people can be explained by a number of factors: higher unemployment; the cost of living; the expense of travel; high demand for new and expensive technological products; and larger mortgages.
Nevertheless, the older generation clearly have a part to play in mentoring the young to make stronger commitments to saving.
It is important to note that standard cash ISAs are not necessarily the most competitive products on the market. Longer term bonds, especially those fixed to inflation, have a better chance of curbing losses made in real terms.
Which4Us savings tables can show you some of the best rates available on the market. Why not see if you can increase your savings with a better deal?