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Jul 24, 2006
According to a
study by IFA Promotion, the organization promoting the benefits of independent
financial advice, UK
adults are likely to spend extra money on luxuries rather than savings or debt
payments.
The IFAP research
shows that over 30 million UK
adults (70% of the UK
adult population) claim they are not in a position to increase the amount they
save each month. When faced with the prospect of a 25% increase in household
income, UK
adults would much rather spend the additional money on luxurious items than
save for their financial futures, IFAP explained.
The most popular
use for an increased income would be to spend some of it on a holiday, with
nearly two thirds of UK
adults (63%) choosing to do so. Over half the population (54%) would use the
money to fund home improvements, and 46% would put cash towards updating their
wardrobe. In contrast, only two in five adults (40%) would pay anything off
their debts and a similar proportion (44%) would channel money into their
retirement savings.
“Despite
well-documented and countless warnings that as a nation, we are not saving
enough, it seems that people are yet to adopt a sensible savings mantra. And
while the research is based on a hypothetical situation, it serves to highlight
a very real problem in that people are too reluctant to forgo their spending to
secure a comfortable financial future. People need to place clearing debt and
saving much closer to the top of their list of financial priorities,” says
David Elms, Chief Executive of IFAP.
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