According to personal and business bank account industry experts, a gobsmacking six million Brits have no money put aside at all in savings accounts.
The Retail Prices Index indicates that the average price of retail goods has jumped 5.2 per cent in the last 12 months, making it nigh impossible for families to engage in any savings activity. This has left a total of 13 per cent of Britons without the ability to put aside money in savings products such as ISAs or fixed rate bonds, according to National Savings & Investments, the savings arm of the Government.
NS&I remarked that one out of every three Brits has fears of losing the ability to cope in the face of a jobs loss or a cash emergency. The new survey data is the latest in a long string of dire reports that highlight the erosion of the once-vaunted ‘savings culture’ of the UK.
The Office for National Statistics commented recently that strict pay freezes and rocketing prices have taken a toll on the savings ratio of UK consumers. Indeed, savers have found little to no incentive to engage in savings activity since the Bank of England’s Monetary Policy Committee set the base rate at a record low of 0.5 per cent in March of 2009.
Families that have already been struggling in the wake of the global economic recession have had to dole out more of their income every month in order to stay afloat, the Office for National Statistics said. The reason for the struggle is due to prices at supermarkets and petrol pumps jumping so swiftly.
With only pennies on the pound left over, many Brits have all but thrown in the towel. Rock-bottom savings rates haven’t been helping any, as the BoE’s 0.5 per cent base rate holds them back.