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Britons are attempting to guard their savings pots by making smaller withdrawals, new research shows.
Consumers may not be putting aside as much money as they have done in the past, but they are trying to protect what savings they do have. This is the conclusion of a new survey by Birmingham Midshires, which shows that Britons are resisting the urge to raid their savings to help them cope with the financial crisis.
It reveals that in the last three months, the amount of money being invested in savings accounts has dropped by 34 percent. However, people are withdrawing far less than has been the case in previous quarters - taking out an average of £343 during the three months to October compared to £434 in the three months to July.
Tim Hague, director of savings and investments at Birmingham Midshires, said: "While there is clearly pressure on disposable income, people are trying to preserve the buffer of a savings pot. Making deposits where possible and having existing savings remain critical in the months ahead."
The main reasons for withdrawing money from savings accounts were to cover the cost of emergency home and vehicle repairs and overspending on current accounts - cited by 26 percent and 19 percent of respondents respectively. Consumers are also raiding their savings to fund holidays, to pay for unexpected utility bills and to pay off debts.
Rates on savings accounts have come down sharply following the Bank of England's decision to cut the base rate by 1.5 percentage points to three percent.
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