UK savings set to rocket
August 10, 2008
The level of cash savings in the UK is set to rocket over the next five years based on current savings trends according to a recent report. The report claims that by 2012 the level of savings in the UK could hit £1 trillion. The level of cash savings has rocketed over recent years, according to the Alliance and Leicester, growing five times faster than unsecured borrowing over the past seven years. Based on this trend cash savings could be as high as £1 trillion in just five years state officials from the bank.
According to research the level of cash savings in the UK has almost doubled since 2000, rising to £876 billion from just £426 billion. Over the same period unsecured borrowing has risen by £79 billion, and now stands at £214 billion. The research also indicated that there was an increasing gap between people with liquid assets and those without, and those that move money into cash accounts from investments.
The Alliance and Leicester also conducted a poll recently involving a survey carried out on two thousand people. Over one third of those polled stated that over the next few years they were looking to increase their level of cash savings. One official from the bank stated that some people are using money from pensions and long term investments to boost their cash savings, and based on this cash savings levels could rocket by 2012.
The Alliance and Leicester stated: “We have a savings paradox. Households appear to be stretching themselves to meet increased taxation and a general rise in the cost of living. However, perhaps surprisingly, overall savings balances have continued to increase. It seems that the pressure has fallen on pension contributions: evidence suggests that people in their prime years are saving more cash with a view to funding their retirement.”
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