Press release Aegon research: Two fifths cut monthly savings since start of cost-of-living crisis

• 42% of adults have cut back on monthly savings since Jan 2022.
• Those under the age of 50 cut back the most - £84.90 per month less.
• Females (47%) more likely to have cut back monthly savings than males (36%).
• The main change is being forced to use savings for everyday items and emergency spending.
• The cost-of-living crisis has also affected retirement plans. One third of those not yet retired (35%) say that the age they plan to retire has changed.

The cost-of-living crisis is negatively impacting on the savings of adults across the UK, new research commissioned by Aegon has shown.

Two in five (42%) say that the amount they save monthly has decreased, compared to only a sixth (16%) who say that the amount they can save has increased.

Of those cutting back their savings the average decrease was £75.30 per month. Those under 50 have cut back the most (£84.90) reporting a higher average decrease compared to people between 50 and 60 who have cut back by £69.80 and those over 60 by £62.70.

Over a third (35%) say that the amount they have in savings and investments has decreased, compared to one in five (19%) who say that this has increased for them. Worryingly, with interest rates having risen sharply, UK adults are three times more likely to report that their debt has increased compared to having decreased (27% vs. 9%).

The main change is being forced to use their savings for everyday items and emergency spending (34%).

Geographically the savings story is similar across Scotland, England, Wales and Northern Ireland with the South West the worst affected with 49% having cut back their monthly savings.

The cost-of-living crisis has also affected retirement plans. One third of those not yet retired (35%) say that the age they plan to retire has changed. One sixth (14%) report that they are planning to delay their retirement including one in 10 (8%) saying that they plan to delay their retirement significantly. In addition, over a quarter of those aged 55+ still in employment (28%) report that they have considered accessing their pension funds earlier than planned, often to supplement ongoing earnings, because of rising living costs. One sixth (14%) have already started using their pension funds before they were planning to.

Steven Cameron, Pensions Director at Aegon, comments:

“Aegon’s financial priorities survey shows that the cost-of-living crisis is impacting on the saving habits of people of all ages in every corner of the UK.

“Research we carried out late last year suggested people’s confidence and optimism is returning when it comes to their personal finances. But as this latest research shows, a large proportion of people have cut their monthly savings just to make ends meet.

“Hopefully inflation will continue to be kept in check or ideally reduce further, alleviating cost-of-living pressures and encouraging people to get back to saving levels at and above where they were before.

“These findings highlight the need for greater attention towards our later years as a nation with an ageing population. The impacts of our fast-changing world can be very different for different age groups. We believe it's particularly important to consider those over 50 as a distinct group, something we explore in more detail in our Second 50 report¹.

“The fact that adults are three times more likely to report that debts increased compared to having decreased is concerning particularly as interest rates have rocketed. Managing debt needs to be looked at alongside savings for the future.

“The shifting sands of Brits’ retirement plans also raise serious questions of political parties in this, an election year. For many, the state pension continues to be the bedrock of retirement plans and we urge political parties to make their state pension intentions clear ahead of the General Election."