The rise in day-to-day living costs is leaving people with no spare cash to put away in savings, according to a study by the Post Office.

Those that are able to save are withdrawing their money shortly after depositing it.

Increases in Council Tax and energy bills have hit the UK’s wallets hard with 4.8 million people saying they simply cannot afford to make regular savings contributions because of rises in living costs.

Almost half of those not saving said they simply have no surplus cash at the end of each month to save.

The Post Office has also discovered the emergence of savings ‘bouncers’, where people who have been making savings contributions to their savings account then find that they have to withdraw the money before the month is over. The study shows that in the past 12 months, half of those who made a contribution at the beginning of the month had to withdraw it before the end. One in five admitted to ‘bouncing’ every month.

Richard Norman, director of savings at the Post Office, said: “Our research shows that millions of people are missing out on earning interest on their savings and have to live without the security of having a savings safety net if they ever found themselves in financial trouble.

“In times of economic uncertainty, it’s more important than ever to try and put money away. Our advice is try and keep saving regularly, even if it’s just a small amount, and consider saving less frequently such as every other month.”