Academic research suggests that saving money regularly can help to improve sleeping patterns. It also helps people to relax and adopt a more optimistic outlook on the future, regardless of how small the amount saved is. This is according to the report conducted by Bristol University, which also found that individuals on lower incomes who saved regularly had similar happiness levels to those with larger incomes who didn’t save. Since surveys suggest that around 25% of adults in the UK have savings of less than £100, this report is seen as an important way of dispelling myths surrounding how much needs to be saved.
Even though interest rates paid by banks and building societies have improved, it has been hard for people to save in recent years. With the costs of living on the rise, it remains challenging for some people to make savings from their existing budget. Nevertheless, charities have been promoting small-scale savings as a way to improve fianancial resilience. The report from Bristol University further suggests that putting money aside regularly, even a small amount will increase satisfaction, which will help lower the risk of problems related to debt, resale setbacks, or unexpected event issues.
Different life events have varying impacts on mental wellbeing with moving homes or marriage positively affecting the outlook. Simultaneously, job loss or having children affect them adversely. Although these life events are treated as more significant, the report suggests that saving money regularly, even in smaller amounts, can alleviate financial-related anxiety to a great extent.
The Building Societies Association, which sponsored the research report, said that all people should be encouraged to save regularly, just as long as it’s feasible. The report concludes that providers should offer simple and flexible savings accounts in addition to rewarding customers for making savings. According to interest rates on savings accounts, the financial information service Moneyfacts states that the average easy-access account pays 3.12%, with a return of 4.65% for people who’ve locked their money away for a year. However, financial experts anticipate that such returns will drop if the Bank of England reduces benchmark interest rates, which could happen during the latter part of summer this year
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