According to a new study of 2,000 private renters from buy-to-let lender, Landbay, over three-quarters of UK tenants are actively saving money each month, but what for?
Landbay's figures have revealed that contrary to popular belief, renters are not simply saving to buy a house. When asked about their financial goals, the most common aspiration is to go on holiday. 33% of renters are saving for a vacation – this is truest for women, with 38% looking to jet off compared to 26% of men.
Age plays a significant role in savings behaviours. Older renters (55+) are far more likely not to be saving than their younger counterparts – 31% save nothing, compared to 23% of 35-54-year olds and 19% of those aged 18-34.
Yorkshire has the lowest proportion of non-savers, with just 19% not contributing to the piggy bank each month. This is followed by the North East (20%) and East of England (21%). At the other end of the saving league table, almost a third (30%) of the South West are failing to save, followed by the South East (27%) and East Midlands (25%).
Coming in second, a financially savvy 31% of renters are saving for an emergency fund. Again, this is more common in women at 33% than men at 28%. However, men are more likely to be saving for retirement, with 18% preparing for later life compared to 12% of women.
Of course, some renters are looking to take the first step onto the property ladder although their scale is surprising. Just under a quarter (23%) are saving to buy a house, again led by women at 26% compared to men’s 17%. Perhaps unsurprisingly, younger renters are leading the homeowning aspirational charge – 38% of 18-34 year-olds are saving to buy, compared to 25% of 35-54 year-olds. A mere 3% of 55+-year-olds are looking to save a home – of this age group, the largest proportion (40%) have no savings goal in mind, compared to 29% of 35-54 year-olds and just 17% of 18-34 year-olds.
The top 10 savings goals for UK renters are:
1. Going on holiday - 33 %
2. An emergency fund - 31 %
3. Buying a house - 23 %
4. Retirement - 14 %
5. Spend on my children - 10 %
6. Buy a car - 10 %
7. Leisure (cinema, days out) - 9 %
8. Clothes - 9 %
9. Buy a new piece of technology (phone, TV, etc.) - 5 %
10. Another goal - 3 %
John Goodall, CEO, Landbay comments: “The widely held assumption that renters are simply biding their time until they can afford to buy a house has been proved wrong. Renting affords a disposable income which savers are using to fund the lifestyle they want, whether that’s a lavish summer holiday or preparing for retirement. This, alongside the increased demand for flexibility, means the private rental sector is appealing to a wider range of people, and as such is getting more necessary by the day.
“For the new Government, investment in the private rental sector will be crucial. The penalisation of landlords must stop, and the rights of tenants and landlords alike need to be protected.”
