One in ten prefer to stash cash under mattress

Savers are much more cautious now than a year ago, with one in ten people thinking their money would be safest under the mattress, reveals new research from Newcastle Building Society. In light of the credit crunch, the number of people preferring to stash their cash at home has almost trebled (from 4% to 11%), and peaks as high as 15% if you live in the Midlands and Wales region.

However, more savers would prefer to invest in building societies than anywhere else, with over a third (34%) believing them to be the safest places.

The past 12 months have seen the number of people choosing to invest in either banks or building societies decline by 17%, according to the research. A year ago, almost three quarters of people surveyed would have considered banks (28%) or building societies (46%) to be the safest places to invest their money.

Wendy Lee, Commercial Director at Newcastle Building Society, believes that although consumer confidence in financial institutions has, unsurprisingly, declined over the past year, it is encouraging to see that building societies still come out on top, with over a third of people still considering them to be a safe option.

Wendy Lee says: "These findings are a stark sign of the times, but they are also exacerbated by the hype surrounding the ‘credit crunch'. With some attractive savings products available, you might think people are barmy to stash their cash at home. Unfortunately, some savers now have an exaggerated view that investing their money with a building society or bank can be a risky business, which is not the case.

"People should speak to their savings provider if they are looking to invest or if they are concerned about existing investments - in the vast majority of cases people will be reassured."

Confidence in banks has declined by 5% over the last 12 months with less than a quarter of savers (23%) considering them the safest place to invest their money. And the number of people who are unsure about the safest place to put their money has almost doubled to 13%. An additional 19% would choose not to invest with traditional financial institutions at all.

Age can also affect attitudes towards investing money with 41% of people aged over 55 currently considering building societies to be the safest place to house their savings. This drops substantially to only 21% in people aged from 18 to 24 years.

Wendy Lee continues: "Building Societies have an excellent track record for providing a safe place for savings for those with a little, or a lot, to invest. While we welcome the news that building societies are mostly favoured by those aged 35 and above, societies are also an attractive option for the younger generation and offer a good variety of competitive savings rates."