Kevin Beare & Co International Accountants – Low interest rates encourage savers to spend
More than two fifths of savers have made unplanned withdrawals in the last 12 months, according to a survey by Prudential.
The survey of more than 2,000 people with savings and investments reveals that 43% have withdrawn money from their savings in the past year.
However, 18% admit that they would not have withdrawn their savings if they had received a better a return on their investments. A further 32% said they would have withdrawn less if interest rates were higher.
The survey found:
- 27% said they dipped into savings to cover everyday living costs
- respondents also spent savings on holidays (21%), cars (18%) and home improvements (18%)
- 41% admitted that they regret some or all of their withdrawals
- 22% said they were more likely to dip into their savings if they owned an instant-access savings account.
Andy Brown, investments expert at Prudential, said:
“Household budgets are under a lot of pressure so some unplanned withdrawals from savings or investments are inevitable, but raiding these hard-earned savings to fund one-off or impulse luxury purchases, such as holidays, should ideally be avoided.
“Establishing a regular savings habit that’s sustainable and having a clear understanding of your long-term savings goals is the best way to maximise returns and help reduce the need to make unplanned withdrawals.”