Over 50 percent of British households are using money from their savings in a bid to combat higher costs of living, poor savings rates and Government austerity measures.
The survey, conducted by moneysupermarket.com earlier this month, found that 56 percent of households were using their savings to get by, with a further 26 percent stating that they were thinking of dipping into their savings, and would not hesitate to if things continued to go they way they are.
Despite much focus being cast on the new Coalition Government regime, with increased VAT about to hit households all over the country, the Bank of England has also played a part in creating a nation of economic unrest. Interest rates were recently slashed to 0.5 percent, the lowest they’ve been in history, meaning that a host of savers will receive virtually no return on their money.
Claire Francis, from moneysupermarket.com, said: “Brits still face an uphill struggle as they try to generate value from their savings at the same time as they’re battling rising living costs. Poor savings rates coupled with rising living costs are really squeezing British families and while generating more income on savings is important, people should be doing everything they can to lessen the effects of the current economic environment.”
However Ms Francis also implored households to seek other options before emptying their savings pots: “Before dipping into savings, it’s worth exploring other options reducing the strain on family finances. Spending wisely, using discount vouchers and focusing on repaying any outstanding debts will all stand consumers in good stead, and help free up some extra cash to relieve the financial strain they are currently experiencing. It’s well worth people trying to hold on to their savings and only dip into that money as a last resort.”