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Britons look to raid savings in tough times

Britons look to raid savings in tough times

Category: Savings

Updated: 07/07/2010
First Published: 07/07/2010

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 It is now over 6 months old so the content may be out of date.
Britons are increasingly taking to raiding their savings pots, new research has revealed.

Almost two in five adults confessed to dipping into their saved funds between May and July, with the average amount taken rising from £1,499 in the first quarter to £1,870.

The trend of increasing withdrawals from savings accounts has, in turn, seen deposits into savings pots dwindle by over a quarter.

In the three months to July, adults saved an average of £764, a 26% fall from the £1,031 put away in the previous quarter.

Savings in the south have been hit hardest, with the average amount put away declining from £784 to £1,493, while savers in the north have increased their provisions, from £745 to £801.

The over 55s top the raiding charts, pillaging some £2,284 from their savings pots.

"Despite raiding increasing in the last quarter, this falls far short of the all time raiding high this time last year of over £2,000," said John Bianco, head of Birmingham Midshires Savings Products.

"In addition, 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."

The top reasons given for busting open the piggy bank were for emergency home or car repairs (25%), a holiday or weekend break (19%), overspending on a current account (15%), and unexpected utility bills.

Many savers may find that their account currently offers them an uncompetitive return on their hard earned funds, especially if they have not reviewed their position for some time.

The best savings rates on the market include 3.00% paid on one year bonds from Northern Rock and Barnsley BS.

Those willing to tie their money up for longer can get a rate of 4.10% with Lloyds TSB's three year fixed account, while ICICI Bank pays 4.75% on its five year bond

Find the best savings rates for you - Compare savings accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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