Savers exercise caution

by Gill Montia

Story link: Savers exercise caution

Peopleschampion.com is convinced that consumers are becoming increasingly cautious with their savings in response to volatile financial markets and the Northern Rock crisis.

According to Jim Spowart, chairman of the price comparison website, high rates of interest are losing ground to savings plans with a “safe haven” feel.

In a survey of Northern Rock customers, Peopleschampion found that the majority are looking to place their money in “safer” locations, most particularly with the larger financial institutions.

Meanwhile, figures from Unbiased.co.uk, the financial advice site, show that UK savings increased in the second quarter of 2007, while borrowing fell by nearly £8 billion.

Savings levels reached £47 billion during the quarter and for each pound saved, only eight pence was borrowed, whereas in the first quarter of the year 32 pence was borrowed for each saved pound.

In addition, the Building Societies’ Association has reported that net receipts increased to £1,389 million in August, compared with receipts of £399 million the year before.

National Savings & Investments also has evidence of a strong saving instinct amongst British adults.

In a recent survey it found that one in five respondents claimed to be “saveaholics”, with 47% worrying if they feel they have overspent or wasted money.