New research from the British Bankers’ Association (BBA) suggests that the amount of money people are saving is dropping due to increasing household bills.
In the first six months of 2011, personal deposits and savings at high street banks increased by £6.1 billion, compared with £15.9 billion during the same period in 2010.
The BBA said this may be linked to rising bills and escalating fuel costs – money that would normally have been set aside for savings is now being spent on essential items, they suggest.
David Dooks, statistics director at the BBA, said that “personal deposits are growing only slowly as some people may be using savings to pay higher household bills.
The situation is unlikely to improve, with recent announcements from three of the big six energy companies that they plan to increase their prices in the coming weeks. At the same time, low interest rates mean that saving money is a less attractive option than it may have been in the past.
The BBA also found that the number of mortgages approved by high street banks in June 2011 was 6% less than June 2011. Mr Dooks said that whilst banks are still lending money for house purchases, it is “self-evident” that the mortgage market is weak currently. He added that “some growth is coming from the buy-to-let sector,” however.