Regular Saving Improves Sleep and Optimism, Study Reveals
A new study indicates that consistently saving money can enhance sleep quality and foster a more relaxed and optimistic outlook on life. Researchers from Bristol University discovered that even small, regular contributions to savings can significantly boost life satisfaction. Interestingly, low-income individuals who save regularly experience similar levels of life satisfaction as wealthier non-savers.
Surveys show that 25% of UK adults have savings of less than £100. The challenge of saving has been exacerbated by rising living costs, despite better interest rates offered by banks and building societies. Nevertheless, six out of ten people have developed a savings habit, and financial experts emphasize that even modest savings can enhance financial resilience.
Bristol University’s Personal Finance Research Centre found that regular saving leads to greater life satisfaction by reducing financial anxiety, lowering the risk of problem debt, and providing a buffer against unexpected expenses. Their research, which tracked the savings behavior of thousands over a decade, highlighted the complex interplay of factors influencing financial wellbeing, including pre-existing savings and changing life circumstances.
While saving money contributes to better mental health, the study noted that significant life events, such as moving house or getting married, have an even greater impact on wellbeing. Conversely, losing a job or having children can significantly strain mental health.
Despite improved interest rates, the return on savings is expected to decline when the Bank of England reduces benchmark interest rates, possibly as soon as August. Currently, the average easy-access savings account offers 3.12% interest, while one-year fixed accounts average 4.65%.
Andrew Gall, head of savings at the Building Societies Association, which sponsored the research, emphasized the importance of encouraging savings, even if only in small amounts. The report advocates for simple, flexible savings accounts with incentives to motivate people to save.
Maximizing Your Savings
When considering your savings options, it’s crucial to shop around for the best accounts. Loyalty to old savings accounts often results in poor interest rates. A variety of providers offer savings products, and the best option depends on individual circumstances. Higher interest rates are available for those who can lock their money away for longer periods, but this may not be suitable for everyone.
Charities advise maintaining some level of savings, no matter how tight your budget, to cover unexpected expenses and enhance financial security.
