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Savings not high on list of priorities for Brits

07 December 2009 / by Andy Davies

Brits are failing to make savings a priority despite the current financial instability, National Savings & Investments (NS&I) has said.

New research by NS&I has revealed that over the past five years Brits have not made saving for the future or a rainy day any more of a priority.

For instance, while the average monthly amount saved per head increased to a record high of more than £83 this year – up from just over £70 in 2005, it appears people are not diverting a larger proportion of their income to savings.

The average amount being saved individually, when compared to the person's income has remained fairly constant at 6.06 per cent this year compared to 6.02 per cent four years ago.  

Commenting, Tim Mack, NS&I's savings spokesman, said: "Many people are now putting a few more pounds away each month for greater peace of mind. But when expressed as a percentage of monthly income saved, it is evident that Britons don't seem to have made saving any more of a priority in 2009 than they have over the past five years, despite the economic downturn.

"Taking some time to review how much unnecessary expenditure could be cut back to help focus income on what we really want and need, encourages people to develop a good savings habit."

However, NS&I's survey has suggested that the economic downturn has impacted Brits with respect to their savings goals.

In autumn 2009, 54 per cent of respondents said their main savings objective was to set money aside in case of an emergency – compared to 27 per cent in late 2006 when saving for a holiday or retirement was a greater priority.

Although welcoming that many people are looking to set money aside to protect themselves in case of a financial emergency, Mr Mack warned:

"It is also important not to forget about other major expenses that occur at different life stages where we may need to draw on savings or credit if no other funds are available.

"Therefore we should be looking at increasing the amounts we are saving for such expenses, rather than diverting money from savings set aside in case of an emergency."

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