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Savings accounts suffering due to high inflation

September 8, 2008 by admin  
Filed under News, News-Banking

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Soaring inflation levels, high food prices, rocketing energy bills, high petrol costs, and increased borrowing costs have been impacting on household finances in the UK for some months now, and a recent report has shown that many people are now having to raid their savings in order to try and keep afloat financially. Officials have stated that with the economy heading downwards and inflation spiralling upwards Brits are left with little choice but to raid their savings.

The survey was carried out by Birmingham Midshires, and showed that over the past three months consumers had raided on average around £434 from their savings. This comes as the rate of inflation soared to 4.4% and inflation level on food were shown to have soared by 13.7% over the space of a year. Officials from Birmingham Midshires have estimated that consumers will need to find around 16% more cash over the next three months to cover rising living costs.

The report showed that one third of consumers dipped into their savings to pay an unexpected bill, which officials have said is going to become a more common problem. A fifth of consumers raided their savings due to unforeseen circumstances resulting in them needing additional cash. One quarter of consumers took money for their savings to pay for a holiday, according to the report.

However, the report also showed that people were still managing to put money aside despite the financial doom and gloom.

One official from Birmingham Midshires said: ‘We appreciate that in today’s financial climate, it is proving extremely difficult to put money aside as people are having to spend more on their day to day living costs. However the fact that people are still managing to put significant amounts of money into savings is an encouraging sign for the times ahead.’

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  1. Inflation levels continue to soar says:
    September 9, 2008 at 10:16 pm

    [...] Savings accounts suffering due to high inflation [...]

  2. Curb to charges could mean increase in bank fees says:
    September 13, 2008 at 7:50 pm

    [...] Savings accounts suffering due to high inflation Tagged as: Banking [...]



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