Incomes and savings fall as debts rise

The amount of money people are putting away in accounts with the best savings interest rates is dropping as the financial climate continues to squeeze incomes.

New research by Aviva revealed that incomes have fallen since last quarter and as a consequence savings have shrunk and debts have increased.

It found that between May 2011 and August 2011, average monthly salaries fell by two per cent to £2,018.

Furthermore, a huge 95 per cent of families admitted that they did not feel financially protected after seeing the funds in their accounts with the best savings interest rates dwindle.

"Faced with rising costs and largely static salaries, UK families are more worried than ever about their finances," said Louise Colley, head of protection for Aviva.

The findings follow similar research from R3, the insolvency trade body, which revealed that the current financial climate is making families tighten their belts when it comes to holiday spending.

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2011-08-31 12:43:40 © Moneyextra.com