Saga Savings

The amount that a Saga customer is saving has swelled 50 percent since the beginning of the year.

The flight to safety among savers and investors is leading to increasing levels of customer deposits being held in cash accounts.

New figures from Saga show that their savings deposits now exceed £3 billion. Moreover, the bank said that the amount of cash customers are putting by has grown by 50 percent since the beginning of 2008.

This newly conservative attitude among consumers has come with the worsening of the credit crunch and the beginning of the economic downturn this year. With unemployment on the rise - it has spiked to 1.82 million according to latest official figures - people are looking to save money in order to cushion their own personal finances against the downturn.

The rise in savings deposits comes despite recent moves from the Bank of England to reduce interest rates. Yesterday, it cut its lending rate to two percent - when it was at five percent as recently as early October. These rate reductions have been passed on by most savings account providers, meaning that depositors are enjoying lower interest returns than before.

Paul Green, head of communications at Saga, commented: "In uncertain times, people are turning to British brands they trust and at the same time offer good rates… We predict that with the current economic crisis panning out before them, people will be more inclined to go with a well-known provider when they are next making decisions in the financial marketplace."

A recent poll from Alliance & Leicester shows that one in four people are saving more now than they were two years ago - and that 18 percent of people have moved savings out of stocks and shares and into "risk-free" cash accounts.

Compare savings accounts via money.co.uk