Savings habits improve despite inflation increasing Go compare with our comparison table

Savings habits improve despite inflation increasing

09 February 2010 / by Andy Davies

Rising inflation has not deterred Brits from saving, according to Nationwide, as the number of regular and occasional savers has reached a 16 month peak.

Research by the building society has revealed that 79 per cent of consumers are now regular or occasional savers, although one fifth of people are still not putting any of their money into savings.

In addition, Nationwide's monthly Importance of Savings Index increased by 12 points in January to 98 points as an increasing number of people believe it is important to save for the future.

Welcoming the findings, Andy Hutchinson, head of savings at Nationwide, believes it is encouraging to see a rise in the number of people saving.

"This is despite the continued low interest rate environment - the last time there were so many savers, the Bank of England Base Rate was 5.00%. I think this shows that good returns are still available, especially for those who are willing to lock part of their savings into longer term bonds," he said.

However, Nationwide's Savings Environment Index fell by eight points in January to 73 points as fewer people felt now was the right time to save.

Meanwhile, Mr Hutchinson is warning that future returns on savings could be threatened if inflation continues to rise.

"If the Base Rate remains low, any sustained inflation will diminish the real return on savings and may discourage consumers from saving," he added.

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