Spending less, saving more and clearing debts in 2021

PA Personal Finance Correspondent Vicky Shaw reports on some of the most popular resolutions for the year ahead

Saving more, spending less and breaking free of debts are among the most popular financial resolutions people have made for 2021, a survey has found.

After the coronavirus pandemic threw household budgets into chaos in 2020, many people are hoping to steer themselves towards getting back on track over the coming year, according to research by YouGov carried out for Metro Bank.

More than half (54%) of people questioned said they are determined to manage their money better in 2021 – rising to two-thirds (67%) of 25 to 34-year-olds.

Two-thirds (65%) also want to save more next year than they did in 2020, regardless of whether or not they make a specific new year resolution about their finances.

On average, savers are hoping to put aside about £4,400 next year.

One in eight (12%) people made a new year resolution last year which was related to money – and despite the coronavirus pandemic, seven in 10 said they had managed to stick to it. Nearly a fifth (18%) plan to set a specific money resolution for new year 2021, ranging from 31% of 25 to 34-year-olds to 10% of over-55s.

About 21% of women will make a money resolution for 2021, as will 14% of men.

Full-time students are particularly likely to make money resolutions for the coming year, with 27% saying they will do so. People who are in work were as likely as those who are unemployed to be making a financial resolution, with 22% in both groups saying they will do so.

Just 8% of people who have retired are planning financial resolutions for 2021, the research found.

And 21% of people with children in their household are also planning money resolutions. Jo MacDonald, director of bank accounts and deposits at Metro Bank, said: “We all love to start the new year afresh and probably never more so than now, as we bid farewell to the challenges of 2020. It’s great to see from our research how many people want to start managing their money better in 2021. A bit of time spent on finding the provider that best meets your banking needs and delivers great service will be time well spent as people get set for the year ahead.” More than 2,000 people were questioned across Britain in November.

Here are popular resolutions people plan to make with their finances, according to Metro Bank, with the percentages of people who are planning to make money resolutions who agreed with each option:

1. Save more, 52%

2. Spend less, 40%

3. Reduce debt, 25%

4. Get out of debt, 18%

5. Get a better interest rate on savings, 17%

6. Improve credit score, 15% 7. Create personal budget, 11%