23 million Britons stopped or reduced saving last year

Monday 20th February 2012

Nearly half of Britons (47%) have stopped or reduced the amount they save in the last year, research by MoneySupermarket has revealed.

Of this, 12 million people have been forced to stop or reduce their savings just to fund day-to-day living and four million to pay off debt such as personal loans or credit cards (18%). Meanwhile, a further one in five (19%) of Britons did not save in the first place.

The current economic climate has taken its toll on households finances, as the research from MoneySupermarket found the main reason people stopped or reduced their savings was to fund day-to-day living (52%), followed by money needed for household bills (42%). More than a third were affected by a reduced income, which meant they could no longer afford to save (37%).

The research also asked people what they had stopped buying or cut down on in order to save money, over the last year. The majority of people said eating out (45%), followed by buying new clothes (40%) and going on holiday (32%). More men said they had given up drinking alcohol (25%) compared to women (18%), while 29% of women said they'd had to stop or cut down on having their hair styled compared to just 8% of men, in order to save.

Kevin Mountford, Head of Banking at MoneySupermarket, said: "It comes as no surprise that many people have reduced and even stopped saving completely at a time when cost of living is high against a backdrop of ongoing low interest rates. It is easy to accept rising costs as a fait accompli but there are many ways people can lower the impact.

"The first step should always be to review outgoings, ensure you are on the best deal for your needs and start looking at ways you can be more savvy with your spending - all steps which can help to free up some vital extra cash. Using MoneySupermarket to switch your major bills can help save over £1000.

"For those people who say they have been put off saving due to low rates, the top savings rates are paying over six times that of base rate so it is still possible to gain decent returns. For the large number of people with no savings at all, it is important to try and start to save, no matter how small the amount. Even putting away just a few pounds a week can add up- as every penny counts. Over time this will build up and help to pay for unexpected bills."

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Mike Jones