Savings account deposits set to dwindle

15 December 2008 / by Rebecca Sargent
Although Brits have so far managed to maintain decent savings levels during the credit crunch, a recession could mean that savings suffer, the latest quarterly savings survey from National Savings & Investments (NS&I) has revealed.

The study by Government backed savings body NS&I found that, despite tough economic times, 47 per cent of the UK population has managed to maintain a regular savings account deposit so far.

However, as a recession begins to take hold and household bills continue to rise, NS&I has found that 45 per cent of Brits think they are less likely to be putting money aside in the next three months.

And, as unemployment rises, NS&I found that 32 per cent of people would immediately struggle as they do not have enough money to fall back on in an emergency.

Meanwhile, savings account interest rates are falling following the Bank interest rate cut to just two per cent, meaning Brits will be even more unlikely to continue saving, particularly when the research found that Brits are currently putting away an average £191.50 per quarter.

Commenting on the results, Dax Harkins, senior savings strategist from NS&I said: "It is encouraging that in these uncertain times the population has managed to keep steady the percentage of income its set aside earlier I the year.

"However, the downward trend in savings over time is worrying as more than a third of savers currently do not have enough in savings to cover an emergency. It is now more important than ever both to take control of spending and to have an emergency fund set aside."

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