Furthermore, only one out of ten savers (9%) raided their savings to buy luxuries compared with almost two fifths (39%) in the equivalent period last year - a drop of 77 per cent. These figures indicate a change in Britons' saving habits over the last 12 months as people are choosing to keep hold of their savings rather than spend them on luxuries and impulse gift buying.
Necessity not luxury
The number of people utilising their savings to pay for holidays has also decreased by a third (from 18% to 12% since January 2008) and non-essential purchases are being sidelined as people are choosing to protect their savings or divert them onto essential expenses.
Tim Hague, Director of Savings and Investments at Birmingham Midshires commented: "The latest data from our Saving Britain research shows that there has been a marked reduction in the amount people are raiding from their savings and a shift in the reasons for doing so. 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."
The changes seen in Britons' saving behaviour suggest that the current economic climate is having a positive impact on how we manage our savings as raiding has become a measure of last resort:
Savings for weddings and house deposits are up a quarter over the last six months (25% and 29% respectively)
Despite new savings falling to £329 in the last three months from £339 in the preceding three months, raiding as a result of unexpected bills (non utility) is down by almost a third (31%) and overspending on a current account down 16%, highlighting that many savers are planning their finances more effectively
However one in ten has raided savings to pay for higher than expected Christmas credit card bills, an increase of 13% from 2008.
Commenting on the latest findings, Andrew Hagger of Moneynet.co.uk said: "Even though interest rates have fallen sharply, people's attitude towards saving has shifted as the difficult economic conditions start to bite. Savers are adopting a more responsible attitude and even though rates of return are lower, they are more cautious with their savings balances. Many now view their nest egg as a safety net to protect themselves against the growing threat of unemployment."
Reasons for raiding savings - % of population (in three months to January 2008) - % of population (in three months to January 2009) - % change
Impulse gifts or luxury shopping 39 9 -77
Holiday or weekend break 18 12 -33
Unexpected bills (council tax/ insurance premiums/ TV license) 13 9 -31
Entertainment (e.g. dining out) 10 8 -20
Overspending on current account 25 21 -16
Unexpected utility bills 10 12 +20
Higher than expected credit card bill 8 9 +13
Emergency home or car repairs 16 22 +38
Lent money to friends or family 9 12 +33
Loss of job or income 6 9 +50
