Savings accounts are being used less frequently by consumers now, an expert has said.
Holders of savings accounts such as fixed rate bonds or ISAs have been putting less money into their products in recent months, an expert has said.
According to Adrian Coles, director general of the Building Societies Association (BSA), the previous few months in the building society sector have consistently seen “savings outflows”, which may be down to factors such as consumers increasing their spending ahead of the festive period.
“The amount of money that customers have taken out has been more than they have put in,” he stated.
Mr Coles went on to say that levels of saving in the coming 12 months will be more dependent on the state of the country’s general economy as it continues to recover following the recession.
He added that private sector job creation could also play a major role in the rejuvenation of this culture.
The specialist was speaking after the publication of figures from NSI, which show a decline in the amount of money people are saving, with the average now being £82.92 per month.
Meanwhile, parents have been reminded of the importance of saving for their children in the new year.
The demise of child trust funds should mean parents store cash in alternative savings accounts for their offspring such as ISAs or fixed rate bonds.
That is according to Annie Shaw, editor of online resource Cash Questions, who has said it is still important that mothers and fathers store cash away for their children’s futures, despite the fact that the Conservative-Liberal Democrat alliance is withdrawing its contributions to child trust finds.
“We are losing government support for child savings but that doesn’t mean that parents, godparents and grandparents shouldn’t be saving for their children,” she commented.
Ms Shaw stated that this remains “very important” and added that there are several viable alternatives.
This comes after the Institute for Public Policy Research reported that tens of thousands of children in care will lose a vital nest egg for the future when the government abolishes the child trust fund on New Year’s Day.
