Many older savers display a shocking lack of understanding about how they spend their money and often have no idea about how much money they have. More than half do not keep track of their income and bills, according to a new survey by financial firm SunLife.
Despite this one in 10 of all households have an average weekly cash surplus of £685.
The firm’s annual Cash Happy report scrutinised the day to day finances of 3,000 households and found that although the number of homes without a budget had dropped, one in six over 55s have no more than a rough idea about what they have in the bank.
Researchers also found that the over 55s are the worst for failing to budget – but only if they live outside London.
Better off but budget less
Younger savers are more likely to have a budget and they also have an app on their smartphone, laptop or tablet to help them track their finances. Older savers rely more on spreadsheets or notebooks. In the capital, 56% keep to a budget and another 39% say they keep a less formal eye on their cash.
“It is really encouraging to see a slight increase in the number of people who are budgeting formally. It is particularly good to see younger people taking such a healthy approach to their finances,” said SunLife’s Ian Atkinson.
“The over 55s are budgeting less, but they are also better off than 18-24s with more than five times the savings, so it could be that they are not budgeting because they don’t really need to.”
The company also has an online budget calculator that shows how casual spending on non-essential items can impact on savings. For example, buying a sandwich and two coffees every day adds up to £55 a month or £6,583 over 10 years.
“The calculator shows how much someone could save in 10 years if they cut out a few non-essentials from their weekly spending, those few pounds here and there on luxuries can soon mount up into a considerable sum of money.”