Savings Inflows Improve, Building Societies Say

Credit crunch-affected Britons are continuing to save in high numbers, the Building Societies Association (BSA) has said.

According to new figures from the body, savers put by £853 million in May: the highest total for this month since 2002. The BSA also found that 74 per cent of people were expecting house prices to fall further in the year to come, providing an extra impetus to invest in savings rather than in property.

The BSA also credited the recent "savings war" between account providers for increasing the savings inflows. Firms which have had their balance sheets affected by the ongoing global financial crisis have been looking for ways in which to boost their revenues, and have therefore competed with each other for savers' deposits as a result.

This means that best-buy rates exceeding seven per cent have been seen on the high street, which compares favourably with the Bank of England's current base rate of just five per cent.

Adrian Coles, BSA director-general, said: "Yet again, savers have responded to the uncertain economic outlook by choosing the safety of a building society over the volatility of the stock market. High interest rates offered by societies, coupled with attractive product ranges, have seen customers continuing to flock to societies with their savings."