In the event of a surprise bonus, the UK is a nation of savers rather than spenders, new research from Aegon has revealed.
Aegon’s ‘Financial Priorities’ study found that in the event of a surprise £5,000 bonus, 70% of people would prefer to save for the future or pay off debt than spend the money on themselves or loved ones.
More than a quarter (27%) said their preference would be to deposit the bonus into a bank savings account, while 16% said they would put the money into a cash ISA. Just over one in 10 (12%) said they would pay off any existing debt, while 9% would invest the money in a stocks and shares ISA or GIA and 5% would choose to invest the money into their pension.
In contrast, only 9% of people would choose to treat their family and 5% would treat themselves.
Additionally, the study revealed a generational gap between Generation Z (aged 18-27) and Baby Boomers (aged 60-78), with 67% of Gen Z choosing to save or repay debt, compared to 75% of Baby Boomers.
Steven Cameron, pensions director at Aegon, said: “Our latest research paints a picture of a very financially responsible nation. You might have imagined that if presented with a surprise windfall of £5,000, many people would have been quick to ‘splash the cash’ on treating themselves or their families. Instead, we found a much greater likelihood that people would put this extra amount away in savings, or use it to pay off debt.
“It may be that recent economic challenges and the cost-of-living crisis have had a bearing. People may feel a greater need to have less debt or some ‘rainy day’ savings to tide them over should they need it.”
Cameron said the research also showed that facing an unexpected fear was cited as a leading fear among those surveyed.
“Putting a windfall away offers protection from such issues and hopefully gives us peace of mind. It’s always good to have a financial ‘cushion’ to fall back on should you need one. This, plus having debts under control, can also pave the way to properly thinking about longer-term savings, for example, pensions,” he added.
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