- Having savings would help nearly three quarters of Brits feel more financially secure (72%) – but the aspired rainy-day fund is a massive £35k
- Brits reveal the life goals and financial achievements which would help them to feel more secure in themselves
- Those who own a home are more likely to feel financially secure than those who rent
- Tips from financial advisor, Jamie Smith-Thompson, on how you can achieve financial security
From staying out of your overdraft to being in a steady relationship, new research reveals the financial and life goals Brits yearn for in order to feel more secure.
But just how much does the nation rely on their finances to feel stable in their day to day lives?
New research carried out by pensions advice specialists, Portafina, reveals exactly what Brits crave, for their own security, both in life and financially.
What makes Brits feel secure financially:
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- Having savings (72%)
- Owning a house (65%)
- Having no debt (53%)
- Having more money coming in than going out (35%)
- Having a rainy-day fund (28%)
- Owning a car (26%)
- Not hitting zero in your bank account (21%)
- An empty credit card/not maxed out credit card (19%)
- Not using your overdraft (17%)
- Knowing you can afford to help your friends/family financially without it impacting your own life (15%)
When asked what makes them feel financially secure, a staggering three quarters (72%) of Brits said that having savings was the number one factor they look to achieve. The average amount of savings those polled said they would need/have to ensure stability is £34,254,47, much higher than the average rainy-day fund. According to HMRC data, the average ISA saving is £21,339.[i]
The research also showed that those who own a home are 37% more likely to feel financially secure than those who rent (66% vs 29%).
Putting money aside, Portafina asked the nation what other ‘life factors’ make them feel more secure. The top five were:
- Having a steady, long-term job (46%)
- Being in a long-term relationship (42%)
- Having a close relationship with your parents/children (36%)
- Being married (31%)
- Living near to family (30%)
Unsurprisingly, having a steady, reliable job is the number one lifestyle factor that nearly half of Brits need to feel secure (46%). Closely followed by the strength of relationships with partners, parents, children or friends.
Interestingly, women feel more secure than men if they have a close relationship with their parents and children (40% vs 29%) or live near their family (33% vs 26%).
Commenting on the research, Jamie Smith-Thompson, managing director of Portafina said: “It doesn’t come as a huge surprise that the top three things that make people secure are financially rooted. Yet, most importantly, knowing where you stand with your finances can help you focus on your plans and the bigger picture overall.
“Whatever you have, being organised is key to being financially secure. It could mean that you and your family have more freedom in your life choices now and in the future. So, where do you begin on the road to financial security? Here are three top tips that will get you started.”
Budgeting may seem quite dull and take a while to do, but once it’s done and you see the benefits of doing it, you’ll thank yourself later on! Organising your finances is the first step to take on your road to financial security and the best way to do that is to have a budget plan in place. A plan will help you understand how much money you have and know what money is going out of your account each month. And importantly, it will help you to get a grasp of what you can and cannot afford to spend.
A rainy-day fund
After putting a budget plan in place, it’s always best to try and save some money for a rainy-day or an emergency. Putting whatever you can afford to one side will give you peace of mind that the cash is there should you really need it one day. If you think of it as paying yourself first, it will become easier to get into the habit of ensuring that you have the money to cover anything that crops up expectedly.
Shopping around to manage/reduce debt
Over half of the nation see being debt-free as something that makes them feel financially secure. Yet, how are you going to do that if you haven’t checked if you are getting the best savings rate or if you could pay lower charges on your credit card? As you may do with your utility bills, shopping around for the best rate for your savings could help you boost what you already have. Similarly, if you can get your hands on a credit card that offers an interest free period or a 0% balance transfer fee, this will help you to manage and reduce any credit that you have.
For a quick and easy introduction to your pension options when you retire, visit: https://www.portafina.co.uk/pensions/what-are-the-pension-options-at-retirement