As household bills rise, 4.8 million Britons are finding themselves with no spare cash for savings, a new study from the Post Office has revealed.
Steep increases in council tax and energy bills means that 17 per cent of Britons cannot afford to put cash into savings accounts
According to the Post Office, almost half of people who aren’t saving said they simply have no surplus cash available at the end of each month. The study also shows that of those who are able to make a monthly savings contribution, 50 per cent find that, at times, they have had to withdraw the money before the month is over.
The practice of withdrawing savings within a month of depositing is known as ‘bouncing’ and the research shows that 19 per cent of savers are finding themselves ‘bouncing’ every month. These figures coincide with the current economic climate, which, being so unstable, highlights the importance of saving.
Richard Norman, director of savings at the Post Office, said: “Our research shows that millions of people are missing out on their savings and have to live without the security of having a ‘savings safety net’ if ever they found themselves in financial trouble.
“In times of economic uncertainty, it is more important than ever to try and put money away. Our advice is try and keep saving regularly, even if it is just a small amount, and consider saving less frequently such as every other month.”
In light of the current credit turmoil, the study also focused on Britons’ confidence in financial services, it found that 10 per cent of those questioned are now wary of savings accounts and the stock market. However, despite this uncertainty, almost half of respondents said that their savings behaviour had not changed as a result.
Mr. Norman concluded: ”In times like now, people need to be confident that their savings are in a safe place with a provider they can trust. Anyone who feels jittery about saving and wants peace of mind should look for a provider that offers them convenient and instant access to their money.”
Ironically, as the number of Britons able to save falls, savings rates are on the rise. Research by Moneysupermarket.com shows that as banks are becoming more aware of their need for savers, as opposed to borrowers, saving account rates are becoming more competitive.
Kevin Mountford, head of savings and current accounts at Moneysupermarket.com said: “Back in July, savers were barely getting any return above the base rate, but now they are consistently seeing rates one per cent or more above the Bank of England
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