An estimated £40.7 billion in savings collectively held by “self-made” people who have risen up the income rankings could be unlocked and invested towards fuelling UK economic growth, according to research.
The research, released by Santander UK in partnership with the Centre for Economics and Business Research (Cebr), described people in the self made bracket as those who had a modest start in life but now sit in the UK’s top fifth of earners.
The report was based on a survey carried out by Opinium in March and April among 2,000 people across the the UK who sit within the top 20% of earnings.
An annual income of £52,000 was estimated to place people within approximately the top fifth of earners in the UK.
Santander said people in the self made cohort have nearly £40,000 in cash reserves on average, but many are not exploring their options around how to manage their money.
Many headed straight into work or an apprenticeship after school, and a significant proportion work in construction and skilled trades, the bank said.
More than a third (35%) of self made people surveyed who are working in “white collar” jobs said they are the first person in their family to work in such a profession.
More than one in four (28%) people in the self made cohort do not invest any of their monthly earnings and those who do invest typically put away 11% of their income.
While nearly half (47%) said they know investing is important, 22% said they did not know where to start. Nearly one in 10 (8%) of this cohort agreed with the statement: “Investing is not for people like me”.
Just over half (52%) of self-mades grew up talking about money at home, compared with 74% of high earners in general. Less than half (45%) consider themselves financially savvy or financially literate, despite one in eight (13%) owning their own business.
Santander suggested that financial education should be embedded into apprenticeship schemes.
Kitty McCormick, head of wealth at Santander UK, said: “This is a story of unlocking potential. It’s more than just a missed opportunity for individual growth; bridging the investment gap among the self-mades through targeted financial education could inject billions into the UK economy, with benefits for communities and the wider economy.
“The self-mades have proved their earning potential. Now it’s time to back them with the tools, knowledge and confidence to make their income work harder for them.”
