According to a recent research study, nearly five million Brits have dipped into their savings accounts in an effort to pay down debt that had built up on their credit cards over the last 12 months alone.
Personal and business bank account provider ING Direct commissioned the study, discovering that the average saver consumed as much as 5 per cent of the contents of their savings pots in order to do so. The Dutch-owned financial service provider also found that, on average, savings balances in the UK lost £100 to land at £1,684 over the past 12 months.
10 per cent of the survey respondents indicated that they had been able to completely clear their debts over the last year. The current debt average for the country is now £2,513, which is its lowest figure in 18 months.
Economists and other industry experts expressed their surprise at the new stastics given the rampant inflation gripping the UK. Familes have been forced down to the bottom of the barrel in order to keep up with price inflation on such goods as petrol, which is currently just 1p short of a new record high, according to the AA.
Utility bills have been getting more costly as well. British energy providers such as Eon and npower poised to join British Gas, Scottish Power, and Scottish and Southern in increasing the average consumer’s utility bill by nearly 20 per cent in the immediate future.
James Knightly, senior economist for ING, remarked that the rough economic waters the country is facing show little sign of abatement anytime soon. This may end up pushing savings balances even lower as households have to stretch their cash further and further, especially in light of utility bill hikes and also soaring food prices.