People in the UK are taking a more serious approach to savings, according to a new Saving Britain report from Birmingham Midshires.
The company claims increased utility costs, tightening credit conditions and rising debt could be behind the higher number of UK savers. The percentage of savers has risen three per cent from 66 per cent in January 2007 to 69 per cent in January 2008, and two per cent from June 2007. However, according to the report, average savings rose just £1 to £814 since January 2007, and have actually fallen £96 since June.
Director of savings operations, Jason Robinson, says: "While many people in Britain may be finding life a little tougher this January compared to last, it is even more important that those with savings are on the lookout for savings accounts that make their money work the hardest for them."
"2007 was dubbed the year of the saver as the competition in the savings market really hotted up. However, we predict that 2008 will also lend itself well to savers. We advise savvy savers to keep an eye on such accounts to make sure they are getting the best rate available," says Mr Robinson.
Scottish savers set aside 175 per cent more money year-on-year, while savers in Lancashire deposited £778 over the past three months, up 169 per cent compared with the same period a year ago, according to the report.
Mr Robinson concludes: "We recommend that savers should have the equivalent of three months salary in their savings accounts
- in order to account for any financial emergencies that could arise."
Despite these positive findings, research undertaken by Experian for ITV1’s 'Repossession, Repossession, Repossession' programme reveals that debt problems
are causing more and more concern, particularly in the North East of England and Scotland.
According to company spokesperson Bruno Rost, Manchester is "the most financially stressed place in the UK", with Glasgow in second place and Nottingham in third. Research takes into account mortgages, credit and store cards, personal loans and payment behaviour. It also covers publicly available information on previous bad debt such as county court judgements.
Several of the top 'bad debt' regions also had the highest average mortgages relative to house price value, according to another Experian report. Its Geographical Analysis of Mortgage Data reveals that Motherwell was top of the list in Scotland, followed by Glasgow, Swansea, Hamilton and Manchester. The North East of England as a region has the highest level of mortgage debt relative to house price, closely followed by Scotland.
Experian’s chief UK economist, Andrew Burrell, comments: "The highest loan-to-value areas are likely to be those most vulnerable to house price falls, as they will see negative equity emerge more rapidly.
"Negative equity was a major problem a decade ago, as it prevented many families from moving at a time when the market was already being hammered by high interest rates. While we do not expect such a long and deep slump as in the early 1990s, the outlook is for two years of falling prices along with a continued rise in repossessions."
© Fair Investment Company Ltd