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March 10, 2009

Public consider savings to be less important

by Richard Kilner

Story link: Public consider savings to be less important

A recent survey commissioned by the Nationwide has revealed that the number of people who consider saving to be important has fallen since last summer.

In July 2008 66% of people surveyed considered saving to be important, a figure which has since declined to 57%.

It is perhaps unsurprising given the twin effect of extremely low interest rates (presently 0.5%) is to make servicing debt more affordable and to severely reduce the interest income savings deliver.

The survey also revealed that less than half of people (46%) saved regularly and 23% save nothing whatsoever.

Andy McQueen, Nationwide’s savings director, advises people to try and save, particularly as job security in the recession is not as great as most would hope for.

Yesterday the Daily Telegraph reported that returns on savings had hit their lowest level on record, with certain accounts averaging just 0.13%.

The newspaper also raised the bizarre prospect of savers paying banks to keep their money in accounts.

Although the record low interest rates have been highly beneficial to those with mortgages, it has had a severe impact on those who rely on savings for their income (particularly pensioners), as an IFS report released yesterday indicated.

 

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