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Pennies in purse

The ‘invisible’ spending costing you £948 a year

How often do you buy something you don’t really need – and barely pay any attention to doing so? From shop-bought lunches to post-work drinks, we’re all guilty of it at times. But you could be costing yourself £948 a year – and this money could translate into the beginnings of a great pension pot.

The average UK adult spends £18.23 on ‘invisible’ items a week, which adds up to £947.96 a year, according to research by insurance and savings provider Aviva.

Over a working lifetime – between the ages of 18 and 68 – this could stack up to a staggering total of £47,398 per person. This is before any potential inflation increases are taken into account.

This also demonstrates the potential for future savings if people were to cut back on these smaller items. For example, a 20 year old could build a pension pot of £136,000 if they were to invest £21.17 weekly, according to Aviva.  

Invisible items are taken to mean the small, almost invisible, amounts people spend on a regular basis without paying too much attention.

They include snacks such as chocolate bars, fruit and crisps; shop-bought food and drinks; newspapers and magazines; and takeaway food.

The research also showed 26% of people don’t keep track of their savings at all, and a further 22% only keep an eye on the bigger purchases. Could the answer to better money management be in tracking your spending?

Where could your spare cash go?

Seven out of 10 adults who spend on these items - such as chocolate bars and canteen cups of tea- said they would be willing to give up or cut back on their spending in order to save more.

When asked what they would do with the money they saved, many people were focused on short-term savings rather than long-term investments. More than three in ten (35%) said they’d put the money in a standard savings account, while 34% would leave it in their current account as additional disposable income.

Only 5% would invest in a pension.

Of course, it can be difficult to put money aside for your retirement when you are trying to make ends meet day to day and no-one would suggest that you should use money needed for the essentials such as rent or mortgage payments or food and bills to save into a pension.

But you shouldn’t forget about your future. Putting money into your pension pot can help give you the retirement lifestyle you want – you shouldn’t just rely on the State Pension.  

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  • Janis Aitken / 27 October 2015

    If you have got yourself tapped in to debt with credit cards etc these wonderful people will help you . They did me and I have just finished paying off my debt .