Brits Urged to Save What They Can
Brits are giving up saving as high inflation puts pressure on their finances, new research shows.
Although inflation dropped to 4.0 percent in March, it remains above the Bank of England’s proposed rate, and as a result has caused nearly one in ten Brits to stop saving in 2011, Moneysupermarket found.
A further one in five people admit they are saving less than they used to due to the rising cost of living, with over half of the nation being unable to save anything at all, just being able to make ends meet.
“With cuts in benefits, rises in National Insurance contributions, the lowering of the higher rate tax threshold and the general increase in the costs of living, many Brits are feeling the squeeze,” said Kevin Mountford, Moneysupermarket’s head of banking.
“Having a saving pot to fall back on to when times are difficult is vitally important, and while it may not be a priority for many people, trying to put some money aside, no matter how small, can make a real difference.”
One in eight Brits who have used the price comparison site decided to take advantage of the low interest rates to overpay on their mortgage instead of saving.
Basic tax payers will need a savings account that pays at least 5.01 percent to gain benefit in real terms from their savings, to beat the current rate of inflation. This increases to an account paying 6.67 percent for higher rate tax payers and 8.01 percent for 50 percent tax payers.
Increase Savings with a Prepaid Card
If you want to put some money aside each month to have ready for a rainy day, a prepaid card could help.
Some people find their incomings only just meets the cost of their outgoings, however, a prepaid card could help you budget so you do not overspend unknowingly.