A new report has revealed that Brits are being more careful with how they spend their money as the level of savings rises and the level of debts fall.
ING Direct have found using their Consumer Savings Monitor that there was a moderate rise by 4.9 per cent in cash savings for quarter four in 2011. It was also found that most of the saving was done between the months of October to December, which is surprising as this is the busiest month for most with the lead up to Christmas. A median of £1,574 was saved.
The public also didn’t rely on credit cards during the festive season with the average borrowing for credit cards and personal loans falling by 15.4 per cent which was its lowest level since 2009.
ING also discovered that 41 per cent of Brits want to make saving their top financial priority for 2012, which will enable them to save their cash for a rainy day or to use their savings for a repair to their vehicle or home so they don’t have to look elsewhere for the funds such as using a credit card.
Even though Brits have showed they are changing their spending ways the figures also showed that 27 per cent of UK adults have no savings at all.
ING Senior Economist James Knightley commented: “While it’s good news in terms of household balance sheets, the increase in savings and drop in borrowing has come at a price. With real incomes continuing to fall, this has left less money available to spend on goods and services. Consequently, the economy contracted in 4Q11.
“However, plunging inflation through 2012 will ease the burden on households and could facilitate higher saving, lower borrowing and rising spending later this year.”
Copyright Autonet Insurance
By Amanda Bainbridge