On average, savers withdraw £171 each month, with 16 million adults doing so to cover costs – the most popular reason being for unexpected expenses. Two-fifths of savers said this was the reason they needed the cash.
The factors that cause the need to dip into savings include emergency home repairs, such as boiler breakdowns and leaks in the home.
Most of the withdrawals come at the end of the month, when the wait for payday forces 15% of account holders to dip into their funds.
The most likely demographic to withdraw from their savings is 18-34-year-olds, according to Atom Bank’s study. Over half (56%) of the people in that demographic do so each month.
The need to cover shopping and more expensive household bills caused 70% of respondents with a savings account to take some money out of that account.
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Since the Bank of England base rate reduced to 4.75%, interest rates on savings accounts have dropped, but the number of products has risen to an all-time record high.
Savings accounts often have a penalty for withdrawing funds from the account. This can either reduce your interest rate by around 3% or even lead to the account being closed in the case of Sharia law savings accounts, which have expected profit rates.
‘Life’s unpredictability gets in the way’
Aileen Robertson, head of savings at Atom Bank, said: “We often plan to lock our money away, but life’s unpredictability gets in the way.
“Whether it’s a nasty bill out of the blue, a last-minute weekend away or buying your new bathroom earlier than planned, savers often need a fixed saver rate but with some additional flexibility for the times when life happens.”
Robertson added: “It sits between a fixed rate and an easy-access saver, meaning it’s perfect for those for occasional bigger purchases that may be planned or completely unexpected. If money is withdrawn, the rate is still better than most high street bank easy-access rates, and savers can easily rebound the next month to the higher rate.
“These unexpected expenses aren’t always bills and broken boilers. People access their savings to have some fun as well. We know from our research that younger savers in particular find this product particularly appealing due to its flexibility, and we hope to encourage more of this group to have a healthy relationship with saving.”
