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Savings prioritised over luxury spending

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by David Masters
Savings prioritised over luxury spending

Britain’s attitude to saving has seen a stark turnaround since the start of the credit crisis, with most savers now shunning luxury purchases in favour of keeping money in their bank account.

In a survey by Birmingham Midshires, only one in ten (9%) confessed to raiding their savings to buy a luxury item over the last three months, compared with 39% a year ago.

Meanwhile, the average amount Brits raided from their savings in the last three months dropped 40% on year, from £506 a year ago to £302 today.

Dipping into savings to pay for a holiday is also falling in popularity, with just 12% willing to do this compared to 18% in January 2008.

However, saving for weddings and house deposits has increased in the last year.

The results indicate that Brits are cutting spending on non-essentials in order to keep savings back for essential items in case times get even more difficult.

Tim Hague, Birmingham Midshires director of savings, said: “Those who are raiding their savings are doing so for essential reasons such as emergency repairs and increased utility bills rather than spending on luxury items.”

A recent survey by Nationwide found that nearly half (46%) of Brits are regular savers.

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News posted: February 12, 2009

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