Only £500 Savings Says Lloyds Boss

mark_cycling00

Not many individuals have <£500 apparently.  

Average UK savings by age:

 25-34: Between £500 and £5,000
35-44: Between £5,000 and £12,500
45-54: Between £5,000 and £12,500
55-64: Between £12,500 and £25,000
65+: Between £25,000 and £50,000

(source says these are ONS statistics: https://occaminvesting.co.uk/average-savings-by-age-in-the-uk-savings-statistics/#savings)

I'm sure there are lots of fairly dormant Lloyds accounts. A better headline would have been
"Most Lloyds customers have transferred everything to Chase Bank except for about £500" lolz

wmb194

Exodi said:

lordmountararat said:

Lloyds do pay interest on their classic current account up to a balance of £5,000. I used to receive around £17 - £18 a month, but they have gradually reduced the interest to a derisory amount. I closed my savings account with them and put the money into Premium Bonds, where I do win at least £25 - £50 most months, with the dream (unlikely) of a big win.

How many centuries ago was this that you were earning effectively 4.2% AER interest on your current account?

Club Lloyds currently pays about 0.78%, I don't remember it being significantly higher than this... Lloyds has seldom been competitive.

But your point about their derisory savings interest (which currently sits at 0.2%) and premium bonds is completely relevant, because the figures in this article do not account for money held in external accounts.

It's likely that a significant amount of people hold their savings outside of Lloyds for the reasons above.

It's been a while but there have been periods in the past decade when it paid 4% and 3% on balances up to £5k. BoS Vantage current accounts had the same terms and you could have three of those. Post GFC, there used to be lots of great interest paying current accounts e.g., Santander 123 paying 3% on £20k and 5%+ regular savers.

coastline

Households (S.14): Households' saving ratio (per cent): Current price: £m: SA - Office for National Statistics (ons.gov.uk)

Savings ratio UK - Economics Help

No surprise at less than £500 for many people when you consider a family , mortgages , pension servicing and car repayments. There's around a third of households in rented homes . Spare a thought for those who are contributing to pension plans with no idea they won't see a penny when they retire. If the rent is say £700 a month or £8K a year then that second pension will be swallowed up paying the rent. Only way to benefit is owning your own home and become mortgage free. Difficult.

Brie

Define savings.  I have no savings account other than an ISA I intend to use in the coming months which has £10 in it.  

I do have a flexible mortgage and am nearly £20k ahead of my repayment plan.  So while that account shows as being overdrawn I actually have £20k of "savings" in it.  

Grumpy_chap

That whole article on the BBC website seemed to have a massive number of holes in it and really quite poor reporting, with more questions than answers. 

I wonder whether the press-release was published by Lloyds, either to get some free marketing "brand awareness" and show that they are caring, or to deflect from some poor results that are to come along shortly.  The headline certainly did not lead into anything that as an obvious strategy or policy lobbying in the content.  That makes the whole press-release all rather odd.

Just for the sake of discussion, I have picked a couple of sentences:

"customers seeking debt advice jump up by a third in just the first six months of this year"

• from what base?

"Credit card spending on travel was up 300% on last year, but the majority of Lloyd's customers were worried about the cost of living"

• spending on holidays is up from the low holiday spending of COVID.  300% up from a low base.
• how much of that on CC is for convenience and will be cleared quickly?  How much will be carried as CC debt?
• are these two different groups - one group spending on holidays and another (majority) group concerned?

"80% of individuals and UK customers and families have less than £500 pounds worth of savings in their current account and their savings account.  They might have money elsewhere. But what we can see is less than £500. So it's a very important starting point for looking at financial resilience."

• Maybe most do not have their savings at Lloyds bank - they are not a big leader in savings products.
• How much do people have in accounts outside of "current account and savings account"?
• How do Lloyds bank define savings when it includes current account balances?  There is a need to differentiate here between "live cashflow" and "savings".  Not necessarily easy to do.

"half of these customers had increased their balances in the last few years and were in a healthier position than they were before the Covid pandemic."

• That's good, but seems contradictory to the earlier content about crisis.

I really am struggling to see what the actual point of the whole article really was...

masonic

Someone could be quite wealthy and have less than £500 in savings. For example, large 0% credit facility, wealth spread between an investment account, S&S ISA, properties and pension. More than 3-6 months living expenses in cash with no large expenditure planned could be considered too much for someone with a high paying secure job.

Grumpy_chap

masonic said:

Someone could be quite wealthy and have less than £500 in savings. For example, large 0% credit facility, wealth spread between an investment account, S&S ISA, properties and pension. More than 3-6 months living expenses in cash with no large expenditure planned could be considered too much for someone with a high paying secure job.

If someone is "quite wealthy", then the 3 - 6 months living expenses in cash will be greater than £500.

masonic

Grumpy_chap said:

masonic said:

Someone could be quite wealthy and have less than £500 in savings. For example, large 0% credit facility, wealth spread between an investment account, S&S ISA, properties and pension. More than 3-6 months living expenses in cash with no large expenditure planned could be considered too much for someone with a high paying secure job.

If someone is "quite wealthy", then the 3 - 6 months living expenses in cash will be greater than £500.

For anyone, 3-6 months living expenses will be greater than £500. "More than" was used to indicate a maximum, above which "could be considered too much". Someone could hold less than this maximum and even less than £500 in relative safety, especially if their employment/pension income is considerably higher than their monthly expenditure, they have recourse to 0% credit, income from investments, etc.

Section62

wmb194 said:

It's been a while but there have been periods in the past decade when it paid 4% and 3% on balances up to £5k.

I've got a record showing it was paying 4% up to some point in December 2016, by mid-January 2017 the rate was down to 2%.  It dropped again to 1.5% around July 2018, then to 1% around October 2019.

Reg_Smeeton

I can believe it (or certainly that it’s not far off). my records show that in December 2017 (just before I became a Moneysaving expert ) my only savings totalled £1257.60 in a Halifax cash ISA paying 0.2%!