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Saving is back in fashion and 2008 looks like it will be the year of the saver as the cautious seek a safe haven from fallout from the Northern Rock crisis, turbulent share prices and fears of a recession.
New research from Bradford & Bingley found that saving more and taking greater care of managing their finances are Britons' top two financial resolutions for the New Year. Nearly half (48%), intend to save more; two in five (40%) intend to manage their finances more carefully (40%); just over a third (38%) intend to spend less, with more than a quarter of Britons (26%) determined to claw themselves out of the red next year.
Andy Hornby, chief executive of HBOS, Britain's biggest savings institution, said: "Savings will become more important over the next few years. In tougher economic conditions customers save more." Economists at HBOS expect liquid savings to rise by £80bn to £1,100bn in the coming year. The bank has attracted savings of £1bn in November alone, although it was not possible to say how much of this was from savers switching to HBOS accounts from Northern Rock.
Just before Christmas the Building Societies Association reported record inflows for the month of November with more than £2.3bn of new savings cash - the third-highest amount ever and almost three times the £848m received in the same month last year.
Adrian Coles, Director-General of the Building Societies Association said: "In the last three months building societies have received new deposits of roughly the same value as they received in the entire 12 months of 2006. Much of these savings are likely to come from further withdrawals from Northern Rock bank. They also reflect the attractive rates of interest on offer at building societies which are encouraging people to save."
READ MORE: 2008: The year of the saver?
04 January 2008 © Moneyextra.com
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