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‘Squeezed middle’ in savings struggle

‘Squeezed middle’ in savings struggle

Category: Savings

Updated: 13/02/2012
First Published: 13/02/2012

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 It is now over 6 months old so the content may be out of date.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 'squeezed middle' are facing an uphill struggle to try and grow their savings pots, new research has revealed.

While the tough financial climate is persuading Brits that saving is a must in such constrained times, the spending pressures being felt by the so-called 'squeezed middle', who make up around half of the UK population, means they are struggling to boost their reserves.

According to HSBC, almost three quarters (71%) of Brits saved in 2011, despite interest rates remaining low.

Increased awareness of the uncertain financial climate means 21% of people now say that saving for a rainy day is their priority.

In contrast, long term goals are losing out, with one in ten (12%) planning to save more over the next 12 months to contribute to their long term goals compared to one in five in 2010.

Yet despite the drive to save, not all are able to save more than they withdraw, with the nation neatly dividing into four distinct, comparably sized groups, according to savings success.

The groups of 'Struggling' (23%) and 'Static Savers' (23%) represent the 'squeezed middle' of middle income families whose finances are coming under pressure due to sustained high cost of living, frozen salaries, and a rise in part time workers and unemployment, affecting their ability to save.

Of significant concern, however, is the 29% of adults who admit that they are not saving anything at all.

When it comes to where nest eggs are being kept, the security offered by an account with a bank or building society still holds a lot of sway, with two thirds (65%) of people holding savings in a deposit-based account.

With saving certainly figuring a lot higher in people's list of priorities, consumers were eager to let us know their favoured high street savings provider in our recent Consumer Moneyfacts Awards 2012.

Coming out on top as the Best High Street Savings Provider was Yorkshire Building Society, who beat stiff competition from Nationwide and the Post Office to take the award.

"Offering competitive products across all areas, Yorkshire Building Society has also maintained a straightforward and simple approach to keeping customers happy, which is why it was singled out for offering excellent service and savings facilities," said Sylvia Waycot of Moneyfacts.

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