Birmingham Midshires Reveals Savings Fall

The economic downturn is putting strain on consumers ability to save money, new research shows.

In figures recently published by Birmingham Midshires, as a part of its Savings Britain campaign, it was revealed that in the three months leading up to the end of October the average person was able to save some 339 pounds. Such a figure represents a fall of 34 per cent from the 516 pounds that was recorded during the same period of time in 2007. The decline was largely attributed to the continuing impact of the credit crisis.

However, it appears that young people are increasingly preparing themselves for their financial future with those between the ages of 18 and 24 revealed as saving an average of 276 pounds from August to October. This is a rise of 31 per cent from the 191 pounds such consumers put away in the three-month period leading up to the end of July.

Continuing, the financial services firm reveals that the amount of money Britons are raiding from their savings schemes has also fallen. During the 12 weeks ending in October, it was shown that a typical amount of 343 pounds was withdrawn from such accounts, 100 pounds less than was taken out in the preceding three-month period. Birmingham Midshires reports that this could indicate that an increasing number of people are “thinking twice before touching their savings, pointing toward a more cautious approach to draining precious funds from rainy day savings”.

Indeed, it was revealed that when consumers do choose to withdraw money they are increasingly doing so to help meet crucial spending commitments.

One in six (16 per cent) Britons claimed to have raided their savings in the past three months in order to meet the cost of unexpected utility bills, a rise from the 13 per cent of people who did this in the previous 12-week period. Meanwhile, just over a quarter of respondents state to have taken money out of a rainy day fund to pay for emergency repair work to either their home or car, with seven per cent reporting to do this to cover for loss of earnings. Furthermore, it was shown that 14 per cent are currently using the money they have saved to pay off debts, up from the 11 per cent who did this in between May and July.

It could be possible that such areas of debt include personal loans or credit card bills.

Commenting on the findings, Tim Hague, director of savings and investments for Birmingham Midshires, said: “The latest Saving Britain findings reveal that Britons are taking a responsible attitude to saving in a difficult market climate. While there is clearly pressure on disposable income, people are trying to preserve the buffer of a savings pot. Making deposits where possible and having existing savings remain critical in the months ahead.”

For those consumers worried about their ability to manage their finances in the coming weeks applying for a debt consolidation loan may prove to be effective. By selecting such a loan, borrowers could find that they are able to merge various spending constraints into a single low-cost monthly repayment, so leaving them with more disposable income. Such money could then be placed into a savings scheme for use in later life. This could prove to be particularly useful after Alliance & Leicester recently urged those with an individual savings account to make best use of the tax-free savings product and avoid leaving investing money in it until the last minute.

Loan Arrangers providing you with breaking debt consolidation loans news.