New Year resolution that sticks - saving money

New Year resolutions made on the wave of year-end optimism rarely last more than a day or two, never mind weeks. But according to AA Savings, one top resolution: ‘Must save money!' does seem to have stuck.

Not only are more people saving, but compared with the first weeks of last year, they are also saving more.

Mark Huggins, director of AA Financial Services, says: "The months either side of Christmas are more likely to see a net outflow of funds especially when the damage drops through the letterbox, with many people worrying what their bank statements are going to reveal.

"But this year we have seen a big influx of cash.  I think the recession has led many families to be more prudent than usual by cutting down on luxuries, choosing to stay in the UK for their holidays and perhaps putting off buying a new car or kitchen.  As a result, they're finding they have surplus funds.

"The AA's current Internet Extra account, paying a best-buy 3.00 per cent gross/AER, makes it an attractive place to put that cash yet allowing unlimited deposits and withdrawals."

Compared with last January, the number of investors holding AA savings accounts has grown by almost half (up by 49 per cent) while the average balance has also increased from around £18,300 to a little over £21,300.

And, Huggins says, this year to date is comparable with 2009, because the AA offered best-buy savings accounts then, too.

The AA has also seen savers investing significant sums in its long term accounts such as the 5-year Fixed Rate Savings Account 5.10% gross/AER.

Investors not wishing to tie their funds up for five years could consider the AA's new 3-year Fixed Rate Savings Account paying 4.40% gross/AER.

For more information, visit theAA.com.