British Saving Habits Revealed

16-Sep-2009

The average amount put away by savers has increased by 26 per cent since the start of the year, although 40 per cent of Britons are not saving anything at all, which is also an increase on previous figures.  Research carried out by Abbey Savings suggests that those with savings and investment accounts are saving an average of £206 per month, compared with £163 at the start of 2009.  Using average savings rates as a guideline, this means that British savers will be putting a total of £59.5 billion into UK bank accounts this year.



So how are these savings being made?  20 per cent of savers polled have regular savings accounts, which are likely to have restrictions on how many times money can be withdrawn each year.  65 per cent of savers have an instant access savings account, giving them more flexible access to their money.  Flexibility on access can lead to a lower interest rate, so it's worth thinking carefully about how likely you will be to need to get to your cash and then looking around at what the banks can offer.

An Individual Savings Account (or ISA) is a popular option for British savers; 42 per cent hold a cash ISA whilst 14 per cent have a Stocks and Shares ISA.  ISAs can offer extremely reasonable returns on your money, especially considering that any interest that you earn will be completely tax-free (or any gains on your investments and dividends if you have a Stocks and Shares ISA).  



There is a maximum amount that you are able to invest into ISAs, currently totalling £7,200  - split into £3,600 for cash and £3,600 for stocks and shares.  However, this is set to increase to a total of £10,200, in October 2009 for savers over 50 and from April 2010 for everyone else.  Reza Attar-Zadeh, Director of Savings&Investments, comments:  "At a time when it's never been more important to put money away for a rainy day, it's encouraging that the amount being set aside by savers each month has risen by more than a quarter. "



"And it's not too late for those Britons who haven't yet kick started their savings habit to make a start - putting aside even a small amount each month will quickly add up to help provide them with a safety net in today's difficult economic climate. Opening a cash ISA offers savers one way of achieving this through a tax-free rate of interest to help make their money go further."  Find out more about Individual Savings Accounts, or ISAs by clicking on the link.