A recent report suggests that regular savings may contribute to sleep quality and overall health. Researchers at the University of Bristol say that setting aside a set amount each month, even if it’s a small amount, can make people feel more relaxed and optimistic about the future. The study found that low-income people who save regularly experience the same level of life satisfaction as high-income people who don’t, reported the BBC.
The survey found that a quarter of British adults have less than £100 in savings, reflecting the difficulty of saving due to rising living costs, despite improved interest rates offered by banks and building societies.
Around six in 10 people have developed a savings habit, and charities claim that making it a habit can boost financial resilience, even if you have a limited income. A report from the Centre for Personal Finance Research at the University of Bristol highlights that saving regularly, even if it’s small, can reduce financial anxiety, minimise the risk of debt problems, improve your ability to cope with unexpected expenses and increase life satisfaction.
The report’s findings highlight the complexity of factors that influence well-being, such as existing levels of savings and stage of life. While savings have a positive impact on life satisfaction, major life events such as moving house or getting married have an even greater impact on mental well-being. Conversely, events such as losing a job or becoming a parent can cause greater mental health problems.
Interest rates on savings accounts have improved recently, with easy-access accounts averaging 3.12% and one-year fixed-term accounts averaging 4.65% – although these yields may fall with the Bank of England expected to cut its benchmark interest rate in August.
Andrew Gall, head of savings at the Building Societies Association, pointed to the benefits outlined in the report and stressed the importance of encouraging everyone to save where possible. The report suggests that savings providers should offer clear, flexible savings products and use incentives to encourage customers to save.
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