Fixed-rate bonds with mutuals up by more than £2b last year

Last year saw rising savings rates in regards to mutuals activity as savers with either fixed-rate bonds or ISAs carrying mutuals increased their balances in excess of £2 billion by the end of 2010.

The Building Societies Association recently released research findings indicating the late-term growth of savings accounts with mutuals.  Member institutions reported an increase of £1.5 billion in 2010 December.  The month previous saw increases of an additional £0.6 billion as well.

BSA savings policy head Brian Morris commented on the new research findings by stating that mutuals ended quite strong by year end 2010. However Mr Morris added a warning that 2011 may be a highly challenging year financially for many UK households.  He additionally stated that the coming year may bring economic hardship that may necessitate tapping into savings accounts in order to make ends meet.

In a related news story the gross mortgage lending rates related to mutuals declined 1 per cent from November into December of 2010.  December totals amounted to £1.8 billion while the previous month’s reported lending amounted to £2 billion.

This is on the heels of UK mortgage and savings provider Cheltenham & Gloucester revealing that a significant proportion of pensioners have recently decided to begin saving for the future of their grandchildren.

These so-called ‘silver savers’ have on average managed to put aside approximately £1,000 every year towards their young grandchildren.  The study found that 27 per cent of grandparents begin savings activity upon the birth of a grandchild.  This leads to an approximate £20,000 in savings for the child once he or she reaches their 18th birthday.

Nearly half of the grandparents surveyed by the research study revealed that the primary motivation behind the savings activity was to leave a legacy behind for their grandchildren.

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