Savings increase along with withdrawals

by Gill Montia

Story link: Savings increase along with withdrawals

Latest research from Birmingham Midshires, the mortgage lender, has revealed that more people now have, and are making use of, savings accounts.

Sixty-nine per cent of respondents to the survey reported that they are now saving regularly (a 3% rise on January 2007).

However, UK consumers are also spending more and widening an existing savings deficit.

Those questioned were faced with increased expenditure on necessities such as food, energy, and mortgage payments.

As a result, the average person saved £814 in the past quarter, however during the same period the average consumer withdrew £961 from their savings.

By comparison, in the last quarter of 2006, £813 was saved and just £349 taken out of savings.

Jason Robinson, Director of Savings Operations at Birmingham Midshires, says: “Our latest Saving Britain report shows a slight increase in the number of people saving, which is encouraging. However, we would urge savers to keep an eye on how much they are dipping into their accounts and remain vigilant about their overall savings balance.”

Rachel Thrussell, head of savings at Moneyfacts.co.uk, points out that while families have seen their finances stretched over the past year it is a good time to start saving, because: “The battle for savers money is fierce with many institutions launching accounts paying higher than expected rates following the base rate cut.”