Britons saving more despite downturn

31 March 2010 15:54:57

Savers are setting aside more each month.

The recession may officially be over, but an investigation conducted recently by Santander suggests that Britons are still feeling the effects of the global economic downturn. Indeed, the survey points to the re-emergence of the 'make do and mend' culture more associated with the post-war period than the largesse of recent times. As an illustration of this, eight in 10 respondents said they had reduced their outgoings in the recent past to reflect the pressures they are still under, with packed lunches becoming more popular and trips to the local coffee house less frequent.

However, separate research from Santander shows that as well as recognising the benefits of living within their means, consumers are also looking to save for the future.

People saving more

Despite the fact that many consumers are still struggling to make ends meet, the survey shows that savers are putting more money away now than they were a year ago.

Over the last 12 months, Britons have set aside a collective £59.4bn for a rainy day. This equates to an average of £219 a month per saver, which is up by 34% from £163 a month in February 2009.

"In 2009 our Snap Shot research showed a gradual rise in the amount that people were saving each month, with the latest results highlighting that this trend looks to be continuing in 2010," confirmed Reza Attar-Zadeh, director of savings and investments for Santander." There's no denying that last year was financially challenging so it's great to see that people are continuing to plan ahead and build up that all-important savings pot."

Things to consider

While it is important that consumers continue to limit outgoings and increase levels of savings, it is equally essential that they make their money work for them. With the average British saver holding £39,000 in cash, a failure to put their money into a high interest account could end up costing them dear. Similarly, savers should compare ISAs and make the most of the government tax break.

Cause for concern

Although the Santander surveys point to changing attitudes among UK consumers there is still cause for concern, with 20.1 million Britons still not saving anything at all each month and 11.3 million having no money to fall back on. As a result, it appears that there is still much to do to encourage financial prudence and promote the benefits of comparing savings accounts.

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