A quarter of Brits forced to stop saving in 2011

Published:

10/01/2011

Topic:

Press Release,Money,Savings

The strain on consumers' finances due to the rising cost of living and VAT will force one in four consumers (25 per cent) to stop saving in 2011, according to a survey* by the UKs number one comparison site, moneysupermarket.com.

The survey reveals a further one in ten would like to save, however think it may not happen. The good news is that almost a third (30 per cent) of respondents who already save plan to save more this year, showing not everyone will be cutting back. Five per cent are likely to use the New Year as an incentive to start to save, and a quarter will continue to save at the same levels as last year.

Kevin Mountford, head of banking at moneysupermarket.com, said: "The rising cost of living and recent VAT hikes means that many people are looking at their finances and will have to make cuts accordingly to cope with their situation. Unfortunately one of the first luxuries to be sacrificed when times are hard is your savings.

"It is good to see some people will continue to save and those that can still afford to put money away need to make sure they are getting the best deal for their circumstances. In the current low rate environment many may think it is easier to stick with their existing savings provider, however it is more important than ever to consider switching to the best paying account in order to make their money work harder.

"Whilst generating some income on savings is important, people should also be doing everything they can to lessen the effects of the current economic environment. Before cutting down or stopping saving all together, it's worth exploring other options to reduce the strain on the family budget. Spending wisely, using discount vouchers and shopping around to make sure you are getting the cheapest deals on your borrowing and household bills all stand consumers in good stead.

"Having some savings is important in case your circumstances change in the current climate, and getting into the regular habit of putting some money aside is great, no matter how small. A good way to start is to put some money aside when you get paid and then budget accordingly with the remaining money. A regular saver account would be a good option for anyone in this situation as they allow you to pay in a set amount each month, typically £25-£250 for a much higher interest rate than you will get on most easy access accounts."

- Ends -

Notes to editors:

* moneysupermarket.com carried out a site poll between 31 December 2010 and 05 January 2011. The poll received 3440 of respondents

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