Young people attracted by saving

Young people are now twice as likely to open a savings account as they were just six months ago.

A new survey from Birmingham Midshires found that one in seven (14 per cent) 18 to 24-year-olds had opened a savings account in the last three months, compared to just one in fourteen at the time of its last study, six months ago.

More and more young people are seeing the benefits of saving, with interest rates high and banks and other savings providers competing fiercely to give the best deals.

Jason Robinson, director of savings operations at Birmingham Midshires said: “With 2007 widely accepted as the year of the saver, the savings market is not only appealing more to new markets – the younger generation – but we are also noting an increase in movement with more savers, particularly older savers – switching accounts to get a better deal. The trend is certainly moving away from inertia as people vote with their feet.”

The study found that more people, particularly over-55s, are willing to move their savings around to get a better deal.

However, other research out this week claimed that large numbers of savers are unaware of just how much interest they are actually earning.

Research from Sainsbury’s Bank found that around £112 billion nationwide is being held in account where the savers just do not know what rate they are on.

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Consumers using bonuses to ‘pay off’ mortgage

Almost one in ten diligent Britons are using their annual bonus to pay off chunks of their mortgage, new research carried out by Birmingham and Midshires shows.

Figures released by the financial provider indicate that Britons are proving to be particularly savvy when using their bonuses, with nearly two-fifths having saved all or most of their bonus over the past year.

With regard to their mortgage, people from the Midlands and Wales are found to be the most financially astute, with nearly two-thirds paying off their mortgage.

In total, Britons collected more than £24 billion in bonuses last year, with the average employee receiving £1,758 from grateful employees, allowing many to invest in other avenues than their mortgage.

While some saved their payouts, over one in ten splashed their hard-earned cash on holidays and electrical items.

Jason Robinson, director of savings operations for Birmingham Midshires, said: “It’s easy to be tempted to splurge when we get paid a bonus so the fact that more than half are using their extra cash sensibly is great news.

“You don’t need a huge amount to save or invest so lucky bonus recipients should try to find a healthy balance between rewarding themselves for a year of hard work and squirreling their cash away,” he added.

Tags: jason robinson, Financial services, Wales, two thirds, new research, Birmingham Midshires, holidays, half