It’s Official – The UK Public Are Getting Cleverer With Their Cash

It would likely be surprising to few, but positive aspects of the ongoing recession are rarely mentioned in the press, in comment columns or on blogs. Yet, recent research from financial experts Moneynet and The Office for National Statistics has drawn attention to trends amongst the UK public showing that since the credit crunch we have become more sensible with our money.

Data recently published by the Office of National Statistics has shown that the household saving ratio has increased from 3.9 percent at the beginning of the year, to 5.6 during the second quarter. The rise has caused Andrew Haggar of Moneynet to comment: “People are now getting a bit wiser with their cash, putting it away to cover emergencies or unforeseen events such as unemployment.”

Although the credit crunch and ongoing recession has seemed to make the UK public more conscious of the need to save, and to be more sensible with their cash, the competitiveness of fixed rate savings accounts have also been a direct influence on the habits of savers and spenders.

For example, interest on fixed rate bonds has increased from 2.87 percent to 3.53 percent according to moneyfacts. In comparison to average easy access accounts, the highest return on the best bond rates are around 2 percent more. Simply put, for anyone to make any interest out of their cash, they have little choice but to part with that money for a significant amount of time.

Similarly, ISAs have also hit the news again after new rules for over 50s were introduced in order to allow them to save more money tax free. Yet, despite the increase in options for older savers, competitive rates are still being seen by a range of providers with some banks offering accounts to savers both over and under 50. Prospective savers are becoming more savvy with the type of accounts they are opting for, but they are also willing to invest more time researching providers on and offline in order to get the best rates.

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