Savers dig deep to fund Christmas
New research from the Halifax suggests that savers are funding their Christmas spending with money set aside for other purposes.
Thirty-seven per cent of 2,138 savers surveyed by the bank at the end of November had withdrawn savings in the last three months.
The average amount withdrawn was £1,186, more than double the average savings of £555 made by 75 per cent of respondents to the survey over the same period.
Richard Fearon, Head of Halifax Savings, said: “Raiding your savings can sometimes be inevitable, but in the run up to Christmas the data shows the average amount being raided from savings is much higher than the average amount being saved.”
Twenty-three per cent of respondents said they had raided their savings to pay for unexpected costs such as emergency repairs to their property or car.
Eighteen per cent had used savings to fund a holiday and 16 per cent had used savings because their current account was overdrawn.
The survey found that lower earners withdrew a greater proportion of their income than higher earners.
Those earning between £10,000 and £14,999 per annum saved an average of £772, equivalent to 2.5 weeks wages, and withdrew an average of £983.90, equivalent to 3.5 weeks wages.
In comparison, those earning between £30,000 and £49,000 withdrew £1,532.40, equivalent to 1.5 weeks wages.
The survey also highlighted regional variations in savings habits, with more people in north east England raiding their savings in the last three months than in other regions.
Over this period, people in the north east withdrew an average of £976 of their savings, while putting away just £228.
People in the north east also have the lowest level of savings at an average of £11,951, while Londoners have the highest regional average of £22,366.
Although this Christmas hasn’t even arrived yet, lenders are already urging people to open a savings account to fund next year’s purchases.
Skipton Building Society is offering a Christmas Saver account paying 2.4 per cent interest on monthly savings up to £250 until November 2013.
The account then reverts to a regular easy access account.
Principality Building Society offers a Christmas Savings account paying a slightly higher rate of 2.8 per cent on savings of between £20 and £500 per month, again until November 2013.
Monmouthshire Building Society offers an interest rate of 2.25 per cent, including a 1 per cent bonus rate, on savings of between £1 and £1,000 each month.
The account offers instant access during November and December but withdrawals can only be made earlier in the year by closing the account down.
Consumer group Which? is advising people to check out regular savings accounts before opting for a Christmas savings account, as they can sometimes provide a better deal.