Savings balances increase at mutuals in April

Balances held in savings accounts at mutual institutions increased by £929 million in April compared to an increase of £534 million in March. After interest credited to accounts is excluded, mutuals had a net receipt of £537 million in April.

Commenting on the savings figures, Adrian Coles, BSA Director-General, said: "Mutuals have been able to attract savers by offering competitive rates, especially on popular ISA products. However, maintaining positive inflows will remain a challenge while the Bank Rate remains low as savers may seek higher returns elsewhere, albeit at greater risk, or may opt to repay debt instead."

In the mortgage market, mutuals approved £1,527 million worth of loans in April, compared to £1,677 million in March, a 9% reduction. Gross lending was £1,399 million in April, a 13% fall on the £1,605 million in March.

Commenting on the lending figures, Mr Coles said: "Lending activity in April was relatively subdued compared to March, and given the continuing uncertainty regarding unemployment, possible tax rises, the future path of house prices and the availability of mortgage funds, lending figures are likely to remain at a similar level in coming months."