Britons 'psychologically unable' to save
ACADEMICS have produced the ultimate excuse for Britons' inability to put money aside for a rainy day ? we are psychologically unable to do so.
Some 4.2m people, 14% of the population, are 'spontaneous spenders' with personalities that make it almost impossible to save, according to a new study.
Psychologist Dr Brendan Burchell of Cambridge University said these people live for today without worrying about whether they have got enough money to fund their lifestyle. He said they avoided thinking about their finances and were incapable of planning.
Nearly three-quarters of them were regularly overdrawn and more than half fail to pay off their credit card at the end of the month.
So ingrained is their aversion to saving that 15% of spontaneous spenders who moved to a significantly higher paying job would continue to save nothing, despite their earnings rising by more than 30%.
The research, sponsored by Abbey, identified a further 18% of people who are 'pseudo savers', consumers who know they should be saving but can't help themselves making impulse purchases.
Nearly two-thirds of them regularly have to take money out of their savings account because they have overspent. While the research found these two groups were psychologically unable to save, it showed that 27% of people were patient planners who conscientiously put money aside each month.
According to Dr Burchell, almost a quarter - 24% - of people are 'accidental accruers', people who do not deliberately save money, but who also did not spend impulsively, meaning they ended up with surplus cash in their bank account.
Dr Burchill said: 'This is the first time this research has ever been carried out and I think the findings could really help people understand and overcome the issues that stop them saving.
'It is also important that people understand they will not spend their whole lives in one savings group.
'These groups are fluid and some people may have traits from more than one category - there are times in all of our lives when change is forced upon us such as divorce, ill-health or redundancy and we have no choice but to change spending and savings habits.'
