Penfold calls for push to boost financial engagement in Wales as spending overtakes saving

• Londoners least likely in the UK to spend more than they save each month despite higher cost of living, new research from Penfold shows
• 37% of Londoners say they’ve changed spending habits due to more understanding and knowledge of financial products
• But there is still a need for more pensions education, targeted at all consumers, to engage people with saving

New research released today from Penfold, the digital pensions platform, reveals Londoners are the least likely group in the UK to spend more than they save each month, despite the higher cost of living in the capital. Half (50%) of those in London say they spend more on non-essentials including eating out and events, the lowest of any region and compared to 64% of people in the East Midlands, 66% in Wales and 62% in the South East (see table below).

Penfold’s research also shows that the saving habits of Londoners have improved, with 42% saying that while they used to spend more than they save, they now in fact save more.

Over a third of adults in London said this change in spending habits was due to having a greater understanding of different savings products such as pensions and ISAs. This figure was the highest of all parts of the UK, perhaps also suggesting that education on financial products is more targeted at those in the capital. Penfold says more education on the importance of saving and the benefits can clearly have a direct impact on people putting money into savings and investment products, making them more financially resilient.

Londoners edging ahead on pensions saving

The research found that nearly a third (30%) of Londoners contribute between £101-£200 into their pension each month. Just 16% of people in the capital don’t contribute anything – one of the lowest rates across the UK.

In comparison, Penfold says there is a worryingly high number of people who are still not saving into a pension elsewhere in the country – with 23% of savers in the North East saying they don’t contribute anything towards retirement, despite having one of the lowest costs of living in the UK.

Chris Eastwood, Co-founder at Penfold, says:

“We know salaries are higher in London, but so too is the cost of living, so it’s great to see that people are prioritising their pensions and ensuring they are saving for later life. The reasons for this are difficult to pin down but it’s likely a result of firms spending more on targeting financial products in the capital, creating greater awareness and engagement amongst savers.

“However, our data shows that this level of engagement with saving is unfortunately not equal across the country. For those living outside of London, the industry needs to do more to target education at all consumers, so they truly understand the benefits pensions offer and how to get the most out of their retirement saving pots.

“With the Government’s Levelling Up agenda, we will hopefully see a greater spread of targeting of fintech and financial services products across the country and higher levels of engagement with these.”

“Pensions are complex so greater understanding and accessibility will be the key to driving engagement. Financial education is more important now than ever as Britons face a cost of living squeeze, so pension providers are going to have to work even harder to educate consumers and ensure they don’t put off retirement saving while managing living costs day-to-day.”