Savings dwindle as consumers lose confidence, says Nationwide Go compare with our comparison table

Savings dwindle as consumers lose confidence, says Nationwide

05 August 2010 / by Lois Avery

Savers are losing faith in their ability to put money away, according to new research from Nationwide.

Despite suggestions that the UK economy is recovering consumers are still anxious about their financial situations.

Nationwide’s research showed that 21 per cent were pessimistic about their ability to be able to save in six months time.

This was much more than the 18 per cent who showed negativity about saving at the beginning of the year.

The research also highlighted that more people are failing to save regularly and 22 per cent admitted to not saving anything at all.

Although 62 per cent acknowledged this and said they were saving much less than they should do.

In contrast, despite the increasing pessimism, Nationwide say savings balances actually increased by £1.4 billion in the first five months of 2010.

Robin Bailey, Nationwide's savings and investments director, said: "It is unclear what the exact cause is for the increasing pessimism of savers, though it is consistent with recent data that shows the proportion of income saved in July 2010 fell, despite an actual increase in disposable income, as well as the fall in consumer confidence in recent months.

“This fall in consumer confidence could reflect a general lack of confidence in the economy, meaning some people will feel they have less spare cash to save.  We know, for example, that around half of all consumers believe that it is a bad time to save given the current economic situation."

On the positive side, the findings showed consumer confidence in the Government’s ability to encourage saving following the general election.

“This could be down to post-General Election optimism.  On the other hand, more consumers than ever before believe the Government neither encourages nor discourages them to save, suggesting that consumers are unsure how policy from the new government will affect them.  Either way, it will be interesting to see what impact the austerity Budget will have on the Savings Index going forward."

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