Consumers choosing to save less

Nia Williams

January 12, 2010

The society found that one quarter of people are not saving at all. A reduction in the frequency of saving, as well as more negative attitudes to current savings and the savings environment, have driven down its Savings Index by four points.

Andy Hutchinson, head of savings at Nationwide, said: “December is clearly a busier month for retailers, so there is no surprise that the importance of saving decreased in the run-up to Christmas. It is possible that this was also exacerbated by the fact that December 2009 was the last month before VAT increased back up to 17.5% from 15%, encouraging some customers to make those bigger purchases before the New Year.

”Discouragingly, the number of those who are saving regularly is at its lowest point since the Index began in May 2008. On the other hand, this could be because of seasonal fluctuations – as mentioned earlier – and we mustn’t forget that the Base Rate is lower now than it was 12 months ago. Nevertheless, it’s still worrying that a quarter of us are not saving any money at all.”

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