Brits resist the urge to raid existing savings

The amount Britons added to their savings accounts slowed in the last three months, down 34 per cent, from £516 in the three months to July 2008 to £339 in the three months to October 2008;

But Britons are protecting their savings, withdrawing significantly less than in previous quarters.
The latest findings from Birmingham Midshires' Saving Britain campaign reveal that, whilst there has been a significant drop in the amount Britons have saved in the last three months, the current economic climate is also having a positive impact on Britons' attitudes to saving.

Britons raided just £343 from their savings in the three months to October 2008, safeguarding an additional £100 in their savings, compared with the three months to July 2008, when an average of £434 was raided from savings accounts. These findings suggest that people in the UK are now thinking twice before touching their savings, pointing toward a more cautious approach to draining precious funds from rainy day savings.

Reasons for raiding

Symptomatic of changing financial circumstances, the Saving Britain findings suggest that people are using their savings to pay for subsistence, rather than more frivolous spending such as holidays or entertainment. The most common reasons for raiding savings were to pay for emergency home or car repairs (26%) and overspending on a current account (19%). Both of these ‘reasons for raiding' have increased significantly since July 2008.

Furthermore, with the cost of living increasing, it is perhaps not surprising that 23 per cent more people dipped into their savings to cover the cost of unexpected bills over the last three months than during the previous quarter (16% compared with 13% in the three months to July 2008).

Younger generation wise up to saving

Younger generations are wising up to the importance of saving, people aged 18 to 24 saved £276 on average in the three months to October 2008, compared with just £191 in the three months to July 2008 - an increase of 31 per cent.

Younger people also raided their savings less than older generations, with people aged 18 to 24 withdrawing just £94 from their savings in the three months to October 2008, compared with £149 in the three months to July 2008.

Tim Hague, Director of Savings and Investments at Birmingham Midshires, commented on the findings: "The latest Saving Britain findings reveal that Britons are taking a responsible attitude to saving in a difficult market climate. While there is clearly pressure on disposable income, people are trying to preserve the buffer of a savings pot. Making deposits where possible and having existing savings remain critical in the months ahead."