Brits raid savings as cost of living rises

Brits are raiding their savings accounts in order to compensate for overspending on other accounts, according to the latest findings from Birmingham Midshires’ Saving Britain campaign.

Feeling the pinch of three interest rate rises this year and amid speculation of further rises, Brits have raided their savings accounts by an average of £400 over the past three months - a 14 per cent increase on the amount raided in the last three months of 2006. The Saving Britain report - which probes the savings habits of the nation - found that while more has been withdrawn from savings accounts in the past three months compared with the last three months of 2006, fewer people are raiding their savings.

Over 55s are the worst raiding offenders, filching more than four times the amount of the under 30s (£682 compared to £151). Almost a quarter (23 per cent) of the over 55s raided their accounts for some summer sun. An equal amount of over 55s used their savings to pay for emergency home or car repairs.

Jason Robinson, director of savings operations at Birmingham Midshires, commented on the findings: “While homeowners are feeling the pressures following Bank of England rate decisions, there has never been a better time for people to put away their money. Interest rates at a six year high mean great returns for savers, whatever amount you can afford to put away.”

Enduring the highest cost of living in the UK, Londoners were most likely to dip into their savings and Northerners least (£716 compared to £242)

Young people were most likely to feel the bite over the past three months, with more than one in three (37 per cent) using their savings to compensate for current account over-spending

Almost a quarter (23 per cent) of over 55s raided their savings to pay for emergency home or car repairs.