A new survey from Birmingham Midshires’ shows that people are overspending and using more money from savings to top up current account funds compared with six months ago.
The company’s Saving Britain report, which examines the nation’s saving habits, reveals that increased interest rates and speculation over further increases has led many to ‘borrow’ from savings. This practice has increased 14% in the last quarter compared with the previous three-month period, with Brits using an average of £400 from savings.
However, although the amount of savings used has increased, the number of people raiding savings has actually fallen.
Those aged over 55 are most likely to use savings to bridge the gap, borrowing more than four times as much as those under 30 (£682 compared with £151). Almost a quarter (23 per cent) of over 55s raided their accounts for some summer sun. A further 23 per cent in this age bracket used savings for emergency home or car repairs.
Those in the 25-34 age group were most likely to use savings as a result of overspending from another account, while 45- to 54-year-olds were most likely to spend savings on a holiday or weekend break. Unexpected bills affected those in the 35-44 bracket, with 17 per cent citing bills as the reason for pilfering from savings.
In regional terms, Londoners were the most likely to dip into savings, with Northerners at the opposite end of the spectrum (£716 compared with £242).
Director of savings operations at Birmingham Midshires, Jason Robinson, encouraged people to think carefully about borrowing from savings.
“While homeowners are feeling the pressures following Bank of England rate decisions, there has never been a better time for people to put away their money. Interest rates at a six-year high mean great returns for savers, whatever amount they can afford to put away,” he said.
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