In the event of a substantial surprise bonus, the UK is a nation of savers rather than spenders, according to latest research from Aegon’s Financial Priorities study.
70% of UK adults would prefer to save for the future or pay off existing debt, should they receive a surprise £5,000. This considerably outweighs the 14% of people who would prefer to spend it on themselves or their loved ones.
More specifically, the number one preference for the £5,000 windfall would be to deposit it into a bank savings account (27%). Putting it into a cash ISA is the second-most popular plan for the money (16%), while paying off any existing debt occupied the third spot (12%). 9% of people would invest the money in a stocks and shares ISA or GIA, and 5% would choose to invest the money into their pension.
Surprisingly, only 9% of people would choose to treat their family, and an even smaller 5% would treat themselves.
A slight generational gap can be seen between the intentions of those in Generation Z (aged 18-27) and the Baby Boomers (aged 60-78). The research shows that 67% of Gen. Z would choose to save or repay debt, compared to 75% of Baby Boomers.
Steven Cameron, pensions director at Aegon, said the findings give insights into how recent economic challenges have impacted the UK public’s money mindset.
He said: “Our latest research paints a picture of a very financially responsible nation. You might have imagined that if presented with a surprise windfall of £5,000, many people would have been quick to ‘splash the cash’ on treating themselves or their families. Instead, we found a much greater likelihood that people would put this extra amount away in savings, or use it to pay off debt.
“It may be that recent economic challenges and the cost-of-living crisis have had a bearing. People may feel a greater need to have less debt or some ‘rainy day’ savings to tide them over should they need it.
“Our Financial Priorities research also told us that one of our greatest fears is facing an unexpected bill – and putting a windfall away offers protection from such issues and hopefully gives us peace of mind.
”It’s always good to have a financial ‘cushion’ to fall back on should you need one. This, plus having debts under control, can also pave the way to properly thinking about longer-term savings – for example, pensions.”
