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Savings could hit one trillion in five years

November 8, 2007 by admin  
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According to a recent report the level of cash savings in the UK could hit £1 trillion by 2012 based on current savings trends.

secure bankingAccording to the Alliance and Leicester the level of cash savings has grown five times faster than unsecured borrowing over the past seven years, and if this keeps up cash savings could hit £1 trillion within the next five years. There are have been many concerns raised in recent years over the high level of consumer debt in the UK as well as about lack of savings.

The research also showed that there was an ever widening gap between those with liquid assets and those without, and those that move money from investments into cash accounts. Since 2000 the level of cash savings has nearly doubled, and has increased by £426 billion to £876 billion. In contrast, unsecured borrowing has gone up by £79 billion in the same period, taking it to £214 billion.

In a recent poll conducted by the Alliance and Leicester amongst two thousand respondents, over one third stated that they planned to increase their cash savings over the next few years. Based on this the Alliance and Leicester has stated that cash savings could indeed hit £1 trillion. According to one industry official part of the reason for the rise in cash savings is consumers recycling money from pensions and long term investments.

He stated: “We have a savings paradox. Households appear to be stretching themselves to meet increased taxation and a general rise in the cost of living. However, perhaps surprisingly, overall savings balances have continued to increase. It seems that the pressure has fallen on pension contributions: evidence suggests that people in their prime years are saving more cash with a view to funding their retirement.”

Tom Smith
8th November 2007

Tags: interest, earn, cash, savings, Banking

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