More than 19 million Britons are reluctant to save money for fear of losing it in the current volatile market environment, according to recent research by CoreData Research UK.

The fear of losing money due to market instability has increased in the last year, according to the 2012 Saving Inhibition report.

In 2011, fewer than four in 10 (39.2%) people were influenced by this while this year almost half (49.2%) consider this to be a significant factor holding them back from saving.  This is despite the fact that over six in 10 (63.1%) British consumers believe that they need to save more.

The persistence of market volatility appears to be changing savers’ perception of financial markets. Individuals could start considering volatility to be an inherent market characteristic rather than a temporary phenomenon.

Coupled with this fear of volatility, distrust in the financial services industry is at an all-time high in the UK. The financial crisis and other well-publicised issues such as the misselling of PPI have dented consumer confidence in the industry. The research shows that more than four in 10 (44.7%) individuals are discouraged to save by their lack of trust in the financial industry, a significant increase from 2011 (39.4%).

The study also found out that over 24 million people in the UK are not saving enough and are finding it hard to do so due to a number of reasons. The CoreData UNFUNDED Index© identifies eight factors inhibiting people from saving: the aforementioned market volatility and lack of trust, and a real or perceived sense of lack of available funds to save, lack of financial literacy, apathy, cost expectations, and a preference to spend rather than save.

The inability to save due to a lack of disposable income is the main inhibitor in both 2011 and 2012. More than half (50.5%) of people in the UK struggle to save because they feel they don’t have spare money to set aside.

While both men and women are struggling to save, the lack of understanding of financial products appears to be a slightly greater saving inhibitor among women. More than one in three (38%) women are kept back from saving by this, as compared to one in four (25.8%) men.

Another factor keeping individuals from saving enough is a strong preference to spend money in the present rather than saving for the future.

However, Britons are becoming more aware of the importance of saving, as evidenced by the fact that this factor has decreased its influence on their saving behaviour. While three in 10 (28.2%) were significantly influenced by the preference to spend in the present in 2011, this decreased to two in 10 (21.0%) in 2012.

*There were 1,554 respondents to the 2012 Saving Inhibition survey.