Brits in savings deficit despite strong appetite
While more people are saving than this time last year, Britons have found themselves in a savings deficit over recent months, according to research by Birmingham Midshires.
The research suggests that although more people are saving compared with this time last year (69% compared with 66%), it reveals that the current economic climate – a time when purse strings are tightening throughout the UK as a result of increasing bills and higher levels of debt – has had a distinct impact on savings balances.
The Saving Britain report – which has been probing Britons on their savings habits since 2002 – has found that Britons have set aside an average of £814 over the past three months, yet raided their accounts by an average of £961 over the same time period – leaving an average savings deficit of £147.
The report goes on to reveal that the figures are in stark contrast to savings habits this time last year. In January 2007, while respondents set aside a similar amount of money over the previous quarter at £813, they raided their savings for an average of £349. This leaves a positive savings balance of almost £500.
The 2008 figures represent a threefold increase in the amount raided from savings accounts.
Jason Robinson, director of savings operations at Birmingham Midshires, said: “Our latest 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. We recommend that savers have the equivalent of at least three months’ salary in their savings accounts.
“It is important to top those savings back up and make sure they’re in an account which gives the right balance of access and interest rate.”