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Credit card a problem but Brits hold on to savings

Credit card a problem but Brits hold on to savings

Category: Credit cards

Updated: 13/02/2009
First Published: 12/02/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Unexpected credit card bills are causing some Britons to dip into their savings, research has revealed.

A poll by Birmingham Midshires showed that the number of people having to do so last month reached nine per cent of the adult population.

However, the bank found that consumers are increasingly choosing to avoid relying on their savings, with the average amount raided dropping to £302 in January, compared to £506 a year ago.

And while 39 per cent of people used money they had put away to buy luxuries in January 2008, the proportion dropped to nine per cent last month.

Director of savings and investments at Birmingham Midshires Tim Hague remarked: "Those 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."

This week the UK Insolvency Service advised credit card customers to consider switching provider if interest rates are raised.

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