Belfast Telegraph

Sunday 31 August 2014

30% forced to cut saving: survey

Most people surveyed by Lloyds TSB said they would prioritise paying off debts over savings

Nearly one third of people will be forced to cut back their saving or stop putting money aside completely in the coming months, a survey has warned.

The squeeze from high living costs and stagnant wage growth is continuing to hold savers back from putting cash aside, according to a new quarterly savings index from Lloyds TSB.

Around 30% of savers plan to reduce their saving or stop putting any money away in the next 12 months, while four in 10 consumers currently have no cash left at the end of the month to put into savings.

Some 84% of those surveyed said they would prioritise paying off debts over savings.

Two-fifths of people said that the low interest rate environment means that it is not worth saving in any case - although most (54%) disagreed with this.

Savings rates have plummeted further in recent months following the introduction of a Government scheme last August called Funding for Lending.

This scheme has given lenders access to cheap finance, but it has also made them less reliant on needing to attract savers' deposits.

Financial information website Moneyfacts recently found that the choice of easy-access accounts offering an introductory bonus has halved since last August and bonus rates themselves have also plummeted.

More than 3,000 people took part in the Lloyds TSB study between January and March.

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