Savings likely to be used for spending in 2011, survey shows Go compare with our comparison table

Savings likely to be used for spending in 2011, survey shows

29 December 2010 / by Paul Dicken

People are more likely to use their savings to buy new high value goods in 2011, according to a survey by HSBC.

The bank commissioned a survey of more than 1,000 adults on their attitudes to buying and repairing household goods such as computers, TVs and washing machines.

It found that over half would seek a quote to repair key durable goods if they broke down, while the majority said they would use their savings if they decided to buy new goods.

The bank said: “Following the recent call by the Bank of England deputy governor Charlie Bean for the UK to spend its savings in order to inject some life into the economy, HSBC research finds consumers have taken heed, with the vast majority saying if they were to buy new durable goods they would pay for it using their savings.”

A breakdown of the results showed that 40 per cent of people would use their savings to replace a broken laptop, against 17 per cent saying they would pay for a product on credit. To replace a washing machine, 42 per cent said they would tap into their savings.

While the majority of respondents said they would opt for repairing a broken utility like a cooker or fridge, the highest amount they would be prepared to pay for a repair was £78.

HSBC head of savings Richard Brown said: “The recent recession and increasing inflation together with the planned rise in VAT from January and lower disposable income means that many people will be seeking ways of tightening their belts in the New Year.”

He said while many saw the benefits of ‘mending and making do’ the amount people were prepared to pay for repairs was low.

“In the interest of saving money it may be wiser to pay more for a repair than to replace each time an item breaks as this could in fact save hundreds of pounds in the long run,” he added.

Saving resolutions in 2011

The Office for Fair Trading (OFT) is urging people to make a resolution to save for next Christmas as many people look set to start the New Year with a financial hangover.

The OFT’s tips for saving for Christmas spending are to plan early and budget a realistic amount for spending, research the best saving options and choose the best option for them.

Head of campaigns at the OFT, David Murphy, said: “It may seem a bit early to be thinking about next Christmas when many of us are still eating the leftovers from this one. But we want people to be in a position to enjoy Christmas without getting into financial difficulties and that often requires a bit of forward planning.”

The OFT launched a campaign to raise awareness about Christmas saving schemes and mainstream saving alternatives after the collapse of the Farepak hamper company in 2006. The company provided a scheme for people to save for Christmas food and gifts.

© Fair Investment Company Ltd