Endowment policy cash may help those who fail to save

Publication date | 25/02/2010

The average age that Britons start saving is 25, with men more likely to save for long-term expenses than women, according to a new survey.

National Savings and Investments (NS&I) found that more than one in ten people did not seriously start to save until they reached 40 - and in some cases they were even older.

Some Britons - 15 per cent - admitted they had never saved at all.

Chris Radford, chief executive officer at aap, the UK's biggest buyer of endowment policies, said some of its customers had decided to sell their underachieving endowment policies in order to cover the cost of large expenditures because there was not enough cash in their savings.

Saving money to prepare for the future

The NS&I survey found that while men are more likely to save for the long term to cover the cost of events such as weddings, women look to the short term and stash cash to one side for purchases like holidays.

Over two-thirds of women in Britain prioritise short-term expenses before their futures, while 60 per cent of men save money to buy a house, start a family or for their wedding.

However, it is not just large expenditures that people need to save for. Almost a quarter of respondents admitted they wished they had saved more in the last 18 months to help them get through the economic downturn more comfortably.

A third of people admitted that a financial shock had woken them up to the importance of saving and, as a result, have begun to put money to one side.

Commenting on the findings, John Prout, NS&I's savings spokesman, stated: "It is important to not just see savings as a reaction to major events. Our research shows that 32 per cent of savers say that they have saved in the past but have not managed to continue putting money away."

Selling your endowment policy could cover short and long-term costs

Mr Radford, from aap, said some of its customers had decided to sell their unwanted endowment policies to raise money for both short-term expenses like holidays and long-term costs like a future wedding.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

Reasons to sell your endowment policy