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Recession sees savers re-evaluate priorities

Recession sees savers re-evaluate priorities

Category: Savings

Updated: 15/12/2009
First Published: 15/12/2009

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 It is now over 6 months old so the content may be out of date.

The recession has seen people re-evaluate both their love affair with property ownership and the importance of saving for the future, new research has revealed.

Despite record low interest rates, Scottish Provident found over half (60%) of those surveyed felt it was very important to have savings in order to achieve a reasonable standard of living.

Meanwhile, just 51% thought owning their own home was critical to their standard of living, compared with 60% the last time the survey was conducted in 2003.

The cumulative effect of large rises in the cost of properties together with people's fears of taking out huge loans during a recession has meant that many have decided to shy away from buying a home.

It appears that most people would rather ensure they have financial stability for the future, as opposed to taking on a substantial debt.

Indeed, when planning a purchase of more than £1K, 64% of respondents tend to save up to buy, rather than take out finance or credit, up from 58% in 2003.

This is especially true of 16 to 24 year olds, where 65% would try to save up themselves rather than take out finance or credit.

With the cost of a mortgage significantly reining in the spending power of homeowners, just eight per cent of the age group in question saw going out on a Friday or Saturday night as being very important to a reasonable standard of living.

"These findings underline how there is far less desire to get onto the property ladder than there once was," said Susan Barclay, head of marketing at Scottish Provident.

"With many thousands of people unable to afford what are still high house prices, despite the recession, they are instead seemingly looking to save their hard-earned money to safeguard their own or their children's futures."

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