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Britons become spendthrifts

24 October 2005
Britons are getting better at putting money into their bank accounts and keeping it there, banks and building societies say.

The Building Societies Association (BSA) said that last month people put £1.1 billion more into their accounts than they took out. This is the third month this year that deposits have topped £1 billion.

The British Bank Association (BBA) also saw a £3.4 billion growth in deposits. This is the fourth month in 2005 that they have exceeded £3 million.

Meanwhile, the amount borrowed on credit cards slowed to £100 million in September as consumers tightened their belts.

The trends for saving more and spending less are consistent with the rest of the year.
Peter Dixon, economist with Commerzbank told Reuters he predicts this trend will continue for a few years to come as households rebalance their budgets.

"House prices aren't growing as rapidly as they were so people aren't getting the wealth gain they were and are therefore having to save to get the same effect. Also, they've got huge debts so it doesn't make sense to continue spending," he said.

BSA spokeswoman Rachel Le Broq told the news organisation while the savings trend was positive, a survey the BSA carried last year showed many people still did not have a basic emergency fund of three months' money tucked away.

To read more about Savings Accounts, click here.

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