What are the average savings by age in the UK, and are you on track?

In the UK, average savings by age are higher than you might think. Economic uncertainty, high inflation, and rising living costs have increased the preference for cash savings, even with younger people on lower salaries. According to Flagstone’s research in partnership with Opinium, 65% of UK savers hold more than £1,000 in cash.

This article will go beyond the data to explore the spread of average savings by age in the UK. With this insight, you can assess your own financial health and goals. You’ll also learn how much people in the UK have in savings by the age they approach retirement, and how much the average ISA holder has in their tax-free accounts.

Average savings by age in the UK

Source: Finder savings statistics, updated October 2024

Even though younger savers have less cash savings than their older contemporaries, this represents a greater share of their income.

This is because younger people are at the start of their careers, and generally earning lower salaries than more experienced employees.

Higher UK average savings in ISAs

People making use of tax-free allowances and accounts had higher than average savings in the UK.

According to a 2023 report by HMRC, people with ISAs (Individual Savings Accounts) had the following in their tax-free accounts during the first year of the COVID-19 pandemic:

Source: HMRC, updated June 2023

The average saver could withdraw £29,387 from their ISA. This is because some accounts, like the Lifetime ISA, have penalties if you withdraw outside of the terms and conditions.

The ISA holders with the highest salaries, earning £150,000 or more, could withdraw £94,303 from their accounts.

Older savers (aged 65 and above) could withdraw an average of £50,000 or more. By contrast, savers under the age of 25 were most likely to have ISAs valued between £1 and £2,499.

This suggests that a handful of younger savers have large ISA deposits, raising the average balance for that age bracket to £18,000.

Given the fact that younger people start their careers on lower salaries, this could be the result of older generations gifting money to children and advising them to save in tax-efficient accounts.

High interest rates build wealth

You can grow your savings further by opening high-interest savings accounts. This means that your money can earn interest above the rate of inflation, safeguarding its value. The longer you leave your savings in a high-interest account, the faster it will grow. This is because of compound interest.

In spite of this, there’s evidence that younger savers may not be taking advantage of the opportunity to grow wealth over time.

Savings habits vary with age

Flagstone’s recent research found that younger savers doubted that cash savings could build wealth (49%) compared to their older contemporaries (24%).

Younger respondents also regularly checked savings accounts and knew their interest rates (57%). Older savers were generally more passive, less likely to move savings to secure a better rate.

There are, of course, external factors that can impact your average savings at any age.

Which factors limit your savings potential?

Several factors can limit the money you can set aside, including:

• Income: High earners often have more disposable income to direct into savings. 
• Debt: Repayments, especially loans or credit cards, can become a drag on finances even for higher earners. 
• Unexpected expenses: Unanticipated car repairs or broken appliances can quickly erode your savings if you don’t have a separate emergency fund. 
• Financial knowledge: Lack of awareness regarding tax-efficiency can limit your savings potential. 

By expanding your income, paying off debt, and making use of tax-free savings allowances, UK savers can build their wealth for the long term. 

Savings habits change significantly as people approach retirement. The money you need to save for a comfortable retirement depends on the quality of life you want in your golden years.

But in the UK, what are the average savings by age 60, and how can you increase your savings if you’re off-track?

Average savings by age 60 in the UK

A popular measure for how much you need to save by age 60 is to take your salary and multiply it by eight. As the median income for people in this age bracket is £36,000, this would mean your average savings by age 60 should be approximately £288,000 to match the national average.

This is the number you would need to pay into a pension in cash terms. It doesn’t account for the compound interest you’ll earn over the course of your career.

Setting a retirement income goal that works for you means that you can determine your savings target today. Retirement calculators can help by doing the complicated maths for you. 

To prepare for a more comfortable retirement you can:

• start saving early to benefit from compound interest over time. 
• contribute to both workplace and private pensions. 
• spread your investments across different asset classes to protect your portfolio against market volatility and help your retirement funds grow faster. 
• prioritise reducing your debt before retirement, so your funds can support your living costs and retirement plans.

Frequently asked questions on average savings in the UK

How much does an average UK person have in savings?

According to a 2024 Finder survey, the average UK person has £11,185 in savings, but it’s important to remember this is a mean average across all savings accounts. HMRC notes that savers with active ISAs have average balances that are much higher, at approximately £38,000.

Is £100,000 savings good in the UK?

Yes. £100,000 is five times the annual ISA tax-free savings allowance and approximately ten times the UK average in savings. But if your AER (Annual Equivalent Rate) is lower than the rate of inflation, your money will lose value every year.

Additionally, if you keep £100,000 in a single account then your money is only partially protected by the FSCS (Financial Services Compensation Scheme). FSCS protection reimburses you up to £85,000 per person, per financial institution in case your bank goes bankrupt. 

Savings platforms like Flagstone let you open and manage multiple savings accounts with one login. This means you can protect the entire balance by dividing it across between banks.

Securing above average savings in the UK

Savers that take advantage of tax-efficient accounts like ISAs generally save more. Provided you open high-interest savings account, you can beat the average savings by age in the UK.

If you have a large sum in savings, you can also strengthen your finances by spreading your deposit across multiple savings accounts. This will ensure you’re protected against the unexpected, thanks to FSCS protection.

Access multiple accounts with FSCS protection with one login

Flagstone’s savings platform gives you the flexibility to move your funds between different accounts.

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