Inspiring new breed of cautious savers

Britons are saving more and raiding less so far in 2008 according to new research from Birmingham Midshires. Within the last three months, people have saved an average £938 compared with £910 in the same period a year ago. Meanwhile, people have raided £1,700 this year, down from over £2,000 in 2007.

As day-to-day costs are rising and financial uncertainty takes its toll, Britons are increasingly trying to insulate themselves against future financial shocks, with almost eight in ten people (77%) managing to save something in the last three months. This contrasts with 80% during the same time period in 2007.

Birmingham Midshires asked a GB representative sample of more than 2,000 adults if they had saved in the last three months and if so how much. It asked the same sample of people if they had raided their savings in the last three months and if so by how much. The results reveal an increasingly cautious national picture on saving and raiding, with Britons tightening their purse strings and juggling their finances to manage higher expenses today and in the months to come.

Although there has been a notable rise in the cost of living, more than six in ten Britons (63%) have managed to save in the last three months, with one in seven (14%) managing to save up to £5,000 and one in 100 managing to save more than £10,000. Although many have managed to put large sums of money away, the number of people unable to save for their future is increasing - one in four people (24%) say they have not saved anything in the last three months compared with 20% this time last year.

Given the current economic climate, an impressive six in 10 people (60%) said they have not raided a penny of their savings in the last three months. This is not the case for all - one in 20 (5%) have raided more than £5,000 over the last three months and 16% have raided between £1,001 and £4,999.

Financially secure high earners are the most likely to raid - one in three of those earning more than £50,000 raid over £5,000 from their savings (31%) and one in five of this salary bracket (21%) have not managed to save anything in the last 3 months, compared with only 12% in 2007.

One in two people (54%) earning under £5,000 have managed to save despite rising costs, and 7% of people earning less than £5,000 have managed to save between £1,001 - £5,000. This salary bracket have also been cautious with their raiding, with two in three people (62%), raiding less than £500 in the past three months.

The main reasons for raiding remain very similar year on year - one in four admitting to overspending on their current account (25%) and one in five taking a holiday (21%). New in 2008, the third highest reason for people raiding their savings are current price rises in bills, with one in seven (14%) having to raid due to higher than expected outlays on heating, fuel and electricity.

The biggest raiders for 2008 are those over 55 - more than two in five (43%) admitting to raiding their savings in 2008, compared with 29% of 18-24 year olds.

Tim Hague, Director of Savings and Investments at Birmingham Midshires commented: "This research shows how current market conditions are playing on the minds of Britons. Despite a marked increase in living costs, people are becoming more cautious and managing to save more and spend less, with their financial future in mind. BM understands what is important to UK savers and as a result continues to offer consistently high levels of return on its savings account. However, we would urge savers to keep an eye on how much they are dipping into their accounts and remain vigilant about their overall savings balance. We recommend that savers have the equivalent of at least three months' salary in their savings accounts."