More renters are saving to go on holiday (33%) or for an emergency fund (31%) than for a deposit to buy a home (23%), according to new research from Landbay.
The buy-to-let lender questioned 2,000 private renters in the UK on their saving habits to reveal that three quarters (76%) of tenants are saving money each month, above and beyond their workplace pension.
The average amount saved per month is £99, with men saving £111, compared to women saving £91. Just under a quarter of renters (24%) aren’t saving any money each month.
Landbay’s study hints that age plays a significant role in savings behaviour. Renters aged 55-plus are far more likely not to be saving than their younger counterparts – with 31% saving nothing, compared to 23% of 35-54-year olds and 19% of those aged 18-34.
Yorkshire has the lowest proportion of non-savers (19%), followed by the North East (20%) and East of England (21%). At the other end of the table, almost a third of tenants in the South West are failing to save, followed by the South East (27%) and the East Midlands (25%).
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. In fact, 33% of renters are saving for a vacation – and this is truest for women, with 38% looking to jet off compared to 26% of men.
Saving for an emergency fund came second, with 31% citing this as a financial goal. Again, this is more common in women (33%) than men (28%). However, men are more likely to be saving for retirement (18%) compared to women (12%).
Of course, some renters are looking to take the first step onto the property ladder, although their scale is surprising. Almost a quarter (23%) are saving to a buy a house, led by women at 26% compared to men at 17%.
Perhaps unsurprisingly, younger renters are leading the homeowning aspirational charge. Some 38% of 18-34-year-olds are saving to buy, compared to 25% of 35-54-year-olds. Just 3% of those aged 55-plus are looking to save a home – of this age group, 40% have no savings in mind, compared to 29% of 35-54-year-olds and just 17% of 18-34-year-olds.
“The widely held assumption that renters are simply biding their time until they can afford to buy a house has been proved wrong,” John Goodall, chief executive officer of Landbay, comments.
“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.”
Goodall says investment in the private rental sector will be crucial for the new government. He concludes: “The penalisation of landlords must stop, and the rights of tenants and landlords alike need to be protected.”
The top 10 savings goals for UK renters are:
- Going on holiday - 33 %
- An emergency fund - 31 %
- Buying a house - 23 %
- Retirement - 14 %
- Spend on my children - 10 %
- Buy a car - 10 %
- Leisure (cinema, days out) - 9 %
- Clothes - 9 %
- Buy a new piece of technology (phone, TV etc.) - 5 %
- Another goal - 3 %