EAST MIDLANDS AND WALES TOP THE SAVINGS CHART AS WEST MIDLANDS FALLS TO THE BOTTOM

• East Midlands and Wales are saving 9% of their pre-tax income, the only regions to increase savings ratio over the past 12 months

• Londoners are now one of the regions saving the least in relation to their income despite being the highest earners

• West Midlands feeling the pinch by saving only £1,333, just 6% of their pre-tax income, falling below the national average of 7%

• Almost three fifths (58%) in the capital believe the amount they are saving is still not enough, despite putting away as much as they can

The latest annual Savings Tracker¹ from Aldermore, the Specialist Bank, reveals significant saving disparities between regions in the UK.

In 2018, those in the East Midlands and Wales are now topping the table, saving 9% of their pre-tax income annually by putting away £1,921 and £1,538, respectively. These are the only regions to increase savings ratio over the previous year. Whilst Londoners were saving 10% of their salary in 2017, over the past 12 months this has fallen to 7%. Last year, they earned the most and saved the most. Now they are one of the regions saving the least based on their average income, which remains the highest on average across the country.

Along with Londoners, those living in the West Midlands seem the most likely to be struggling to save. Last year saw the region top the savings chart with a savings ratio of 10%. However, over the past 12 months, the amount the region is saving compared to its take-home income has dropped significantly to just 6%, meaning it joins the lowest in the table. Currently those in the West Midlands are saving £675 less a year than in 2017. As a result, the West Midlands is now saving less than the national average of 7%.

The savings ratio across the regions in the UK:

Feeling the financial fear

Londoners are aware of the negative impact saving a lower percentage of their pre-tax income is having on their financial security. As a result, they are the most financially insecure in the UK with almost two fifths (39%) believing their current financial situation is unsustainable. This compares to a national average of a quarter (25%). It is those in the East Midlands who are least worried about their financial situation, with less than two in 10 (19%) voicing concerns.

When exploring savings habits across the UK, nearly three fifths (58%) of Londoners feel that although they are saving as much as they can, it’s still not enough; unsurprising given the savings ratio in the capital is so low. This compares to under a half (48%) of those based in Yorkshire and the Humber, a region which saves on average £1,736 a year.

Commenting on the latest research, Ewan Edwards, Head of Savings, Aldermore says: “We have seen a significant shift in savings patterns across the UK in our latest Savings Tracker, highlighting how challenging it is to save in the current environment. We have seen two regions – London and the West Midlands – save significantly less of their salary in the space of just 12 months, despite wages increasing.

“Whilst many regions are struggling to save, it is encouraging to see that those in the East Midlands and Wales have increased their savings pots. Both regions are saving more of their salary than those in the capital, despite the average income being almost half of that in London.

“The clear theme that emerges from this year’s Savings Tracker is that the UK needs to be saving more in order to be financially secure in the future. We recognise that this is extremely challenging in a low rate environment, so we encourage people to make small changes in their saving and spending habits, this can go a lot further than expected. We also advise savers to shop around to find the best savings accounts to ensure that their cash is working hard for them.”