Money worries 'lead to rise in saving'

Monday, June 28th 2010

A financial expert has suggested the recession has caused Britons to "sit up and take notice" of their money worries.

Phil Perry, director of ARK Financial Planning, was responding to a Bank of England report that concluded people are now saving more cash than at any point during the last 20 years.

The study revealed £24 billion was put into deposit accounts last year, while £20 billion was taken out in new loans - the first time since 1988 that savings have exceeded borrowing.

Explaining the rise in saving, Mr Perry stated: "People haven't had money to fall back on and I think there is a major concern about being stuck in a situation that ultimately results in having to increase borrowing."

He believed the trend will be a long-term one, with many Britons showing a genuine commitment to saving.

Mr Perry also suggested people are being more creative with the ways in which they save, as traditional building society accounts give little in the way of interest currently.