Small savings lead to big improvements in wellbeing

A groundbreaking new report from the University of Bristol, commissioned by the Building Societies Association (BSA) and Yorkshire Building Society, has revealed the significant impact of savings on the wellbeing of individuals in the UK. The comprehensive study, which includes data analysis from the Understanding Society survey, highlights the various ways in which having a savings habit can enhance mental wellbeing and life satisfaction, particularly among lower-income and younger groups.

Even small amounts of savings can make a difference. Low-income individuals in Basildon and East Thurrock who save as little as £10 a week report significant improvements in their wellbeing and sleep quality. Among low-income individuals, 53% of regular savers reported being satisfied with their lives, compared to just 40% of non-savers in the same income bracket. This correlation remains strong even when considering other factors such as income level and demographic characteristics. Regular saving not only provides a buffer against financial uncertainty but also contributes to a sense of control and security.

The positive effects of saving are particularly pronounced among younger adults and those with lower incomes. Low-income regular savers enjoy similar levels of life satisfaction to non-savers with much higher incomes, highlighting the potential of saving as a tool to improve wellbeing among vulnerable groups. For instance, low-income savers report life satisfaction levels comparable to those in much higher income brackets. This significant finding emphasises the democratising power of saving in enhancing personal wellbeing.

Ros spoke to Chris Irwin from Yorkshire Building Society, Amelia Murray from Be Clever With Your Cash and Sara Davies from University of Bristol.

Photo by Colin Watts on Unsplash