According to one new survey, the majority of UK consumers would sooner raid their savings accounts before they use their credit cards to make ends meet.
While the UK has relied on debt to bridge the gap over the past few decades, personal and business bank account experts say that record lows in savings account rates may be behind the break from tradition. Families throughout Britain have had to face hard decisions due the cost of living rocketing to 5 per cent over the past 12 months, as measured by the Retail Prices Index.
Families have either had to rack up debt, dip into savings, or ration their spending in light of record high inflation. As pay freezes have been commonplace, more and more UK consumers have been scrambling to pay their bills.
The survey, which polled 2,000 people, found that nearly one out of every five would rather drain their savings first in a dire situation. This exceeded the 8 per cent who decided to use a credit card and thus racking up debt.
Research commissioners Moneysupermarket remarked that the figures demonstrate how important it can be to have a bit extra cash stashed away for emergencies. Moneysupermarket spokesman, Kevin Mountford, said that every penny counts in the current economic client, so if there’s any way to avoid borrowing funds from their financial services provider, people should strive to do so.
Petrol prices have been particularly high lately, with average prices of 135p per litre at the pump leaving already harried consumers with even more to worry about. Supermarket prices have also been rising, industry experts recounted.