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February 12, 2009

Britons prefer savings to luxuries

by Gill Montia

Story link: Britons prefer savings to luxuries

Birmingham Midshires has been researching the savings habits of Britons and claims that radical changes are taking place.

According to the lender’s latest Saving Britain report, the average amount withdrawn from savings in the past three months fell by 40% (to £204) compared with the same period of 2007/08.

Only 9% of respondents had made use of savings to buy luxury items, compared with 39% a year ago and the number of people dipping into savings for holidays fell from 18% to 12%.

In addition, incidents of savings being used to pay unexpected bills (non utility) fell 31%, while overspending on current accounts was down 16%.

Director of savings and investments at Birmingham Midshires, Tim Hague, explains that people who are raiding their savings “are doing so for essential reasons such as emergency repairs and increased utility bills rather than spending on luxury items”.

However, one in ten people questioned had raided savings to pay higher than expected Christmas credit card bills, up 13% on a year ago.

The research also revealed that the average amount squirreled away fell to £329 over the past three months, from £339 in the previous quarter.

 

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