BSA report reveals barriers to saving

The Building Societies Association (BSA) has released a report that shows that the biggest barrier to saving is the way you think about money rather than the amount of money you have. The report shows that 30 per cent of those who do not save are unlikely to save, many because they have chosen not to. It seems that simply telling people to save is not effective. Instead, you need to make people want to save.

However, the report suggests that people can get into the habit of saving rather than spending. One way to do that is to think about the long term peace of mind and flexibility they will get from saving rather than considering the immediate sacrifices.

The research suggested that most non-savers admitted that they could afford to save and would not miss up to £50 taken from their account after payday. It recommends educating people so that they want to save and the compulsory inclusion of financial capability in the school curriculum. In addition, it suggests a public awareness campaign to make people examine and change their current savings behaviour. The campaign would show the potential hazards of not saving and encourage people to get into the habit of saving.

Commenting on the report, Adrian Coles, Director-General of the BSA said: ‘This report chooses not to simply accept the instinctive response ‘I can’t afford to save’ and looks deeper into how and why people come to the decision to save or not to save. What is clear is that saving is a very individual decision and whilst some people in one situation view saving as a rewarding priority, others in the same situation see it as little more than a costly sacrifice; for them the act of saving is a cost that outweighs the benefits.’