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Managing my money
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5.1.3 Life’s events and savings

Whatever the motive to save, life events at any age can have an impact on saving plans – sometimes leading to starting or undertaking more saving, but at other times leading to less saving or ceasing to save altogether.

It is highly likely that you have experienced, or will in your lifetime experience, one of the events listed in the table, and so it is important to think about some of their consequences.

Table 2 Effect of selected life events on saving behaviour of people of working age in Great Britain, 1991–2000
Percentage of non-savers starting to save after the eventPercentage of savers ceasing to save after the event
Having a first child2341
Having a seconf or subsequent child1438
Becoming unemployed871
Moving into employment from unemployment2938
Moving house2040
Becoming a carer for at least 20 hours per week1833

According to the data, unemployment has the greatest impact on saving – 71% of savers who experience unemployment stop saving. Moving back to employment has the biggest impact in causing non-savers to start to save, with 29% starting to save. Unemployment and employment have a large direct impact on an individual’s or household’s income and therefore on their ability to save.

The figures for divorce or separation, marriage and having children are also interesting. Joining together to form a household brings economies of scale, and so gives more scope for saving in a household budget. The high figure for non-savers starting to save after marriage isn’t too surprising, therefore. Similarly, divorce or separation may lose such economies of scale, making saving harder. So, again, it is perhaps not surprising to see that 46% of savers cease to do so after divorce or separation.