04-Nov-2010 09:21

Broke Brits are turning to savings..

Recent research shows that cash-strapped Britons are tapping into savings to meet the rising cost of living.

According to ING Direct, savings fell by about 14% during the three months to the end of September 2010, to stand at about £1,771,

ING Direct said deposit account savings was at its lowest level since it began collecting the data in January 2009 & even more worrying a 25% of Britons have no savings at all.

These reductions of savings have been blamed on rising prices and static incomes, whilst at the same time many consumers are paying down debt ahead of public spending cuts.

About 38% of Britons used savings to pay household bills during the third quarter, 31% used money set aside to cover the cost of holidays, 11% used savings to pay for new school year expenses and 20% of people withdrew from savings accounts to help pay off unsecured debt.

Worryingly, confidence is dipping & many are uncertain over future income and spending power.

James Knightley, ING Group senior economist, said: "This report highlights how pressured household finances really are."