London Weighting-How the capital is adopting more saving habits

The latest research from today’s conference is now available on Penfold, according to the digital platform for pensions, Londoners are most likely to spend more than they save each monthly, despite their higher living costs. Half (50%) Londoners say they spend more money on non-essentials like eating out or events. This is the lowest percentage of any region, compared to 64% in the East Midlands and 66% in Wales (see table below).

Penfold’s research also shows that the saving habits of Londoners have improved, with 42% saying that while they used to spend more than they save, they now in fact save more.

A third of London adults said that their change in spending habits is due to a better understanding of savings products like ISAs and pensions. This is the highest percentage of UK adults, which may indicate that education about financial products is more targeted to Londoners. Penfold claims that more education about the importance of saving can have a direct effect on people’s willingness to save money and invest in investment products. This will make them more financially secure.

Londoners move ahead in pension savings

The research found that nearly a third (30%) of Londoners contribute between £101-£200 to their pension each month. Just 16% of people in the capital don’t contribute anything – one of the lowest rates across the UK.

In comparison, Penfold says there is a worryingly high number of people who are still not saving into a pension elsewhere in the country – with 23% of savers in the North East saying they don’t contribute anything towards retirement, despite having one of the lowest costs of living in the UK.

Chris Eastwood, co-founder of Penfold, said: “We know salaries are higher in London, but so too is the cost of living, so it’s great to see that people are prioritizing their pensions and ensuring they are saving for later life. The reasons for this are difficult to pin down but it’s likely a result of firms spending more on targeting financial products in the capital, creating greater awareness and engagement amongst savers.

“However, our data show that this level of engagement with saving is unfortunately not equal across the country. For those who live outside London, the industry should do more to reach all consumers and educate them about the benefits that pensions can offer and how they can get the most from their retirement savings.

“With the Government’s Levelling Up agenda, we will hopefully see a greater spread of targeting of fintech and financial services products across the country and higher levels of engagement with these.”

“Pensions are complex so greater understanding and accessibility will be the key to driving engagement. Financial education is more important now than ever as Britons face a cost of living squeeze, so pension providers are going to have to work even harder to educate consumers and ensure they don’t put off retirement saving while managing living costs day-to-day.”

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