According to one financial expert, there has been a growing trend across the UK for savers to use products such as savings accounts since the global financial crisis began.
Financial comparison and information website lovemoney.com’s consumer finance director, Ed Bowsher, recently said that thanks to a change of attitude in the UK over the last year, savers are beginning to use products such as ISAs. A lot of savers say this is because they have an acute fear of job loss, as they know of people who have been made redundant.
Mr Bowsher commented that consumers seem to have changed priorities since the credit crisis and are now seriously thinking about saving for a rainy day.
The economic expert’s words come on the heels of new data published by NS&I recently in which it was revealed that – at 52 per cent – more than one out of every 2 people in the UK routinely set aside a percentage of their earnings in such products as fixed-rate bonds in order to have more financial security in the future.
Even though the savings landscape in the country is changing, several other experts say, the stubbornly high inflation rate – which has been holding steady at 3.1 per cent for the last few months – can tend to erode savers’ cash, as the majority of savings products available on the market cannot offer an interest rate that matches or exceeds the rate of inflation. Most industry insiders attribute this lack of high-yield savings products to the historically low base rate of 0.5 per cent that the BoE’s Monetary Policy Committee has been reluctant to raise.