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Savings accounts dipped into to pay for essentials

08 July 2010 / by Lois Avery

Savers have been raiding their savings pots this year despite figures showing that people are beginning to save more.

Birmingham Midshires’ Saving Britain research has shown that Brits raided their savings during the first few months of 2010 with two in five British adults confessing to withdrawing savings.

Those over 55 top the raiding chart, withdrawing £2,284 in the last quarter. A quarter of over 55s admit to raiding for emergency home or car repairs. And emergency home or car repairs and paying for a holiday remain the top raiding reasons.

Savings were also shown to be down over all with £764 being saved into a regular savings account or Cash ISA on average in the three months to July 2010, compared with £1,031 during the last quarter. 

These figures come following the Bank of England reporting last month that Britain was becoming a nation of savers once again with people putting away more than they were taking out.

But rather than raiding their funds to splash out on luxuries the statistics show that the money was going towards essentials such as repairs or topping up a current account.

Commenting on the latest findings, John Bianco, Head of Birmingham Midshires Savings Products said: "Despite raiding increasing in the last quarter, this falls far short of the all time raiding high this time last year of over £2,000. In addition, those who are raiding their savings are doing so for essential reasons such as emergency repairs and increased utility bills rather than spending on luxury items."

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