The onset of the 'credit crunch' has kept savings at the top of the agenda for Brits, almost one in three (29%) say they have cut back on their spending and are trying to save more - with the younger generation even more keen to save (36%). Furthermore, one in eight (13%) are now spreading their savings around different banks and building societies - a change spurred on by recent events.
Savers are doing it for themselves when it comes to making financial decisions, according to research from Alliance & Leicester Savings*. For almost half of Brits (48%) the most popular source of information is the internet, when it comes to researching and choosing savings products, with the younger generation leading the way at 56%. Almost a third of people (31%) make decisions based on discussions with colleagues, friends and family, with women more likely to air their thoughts than men (36% and 26% respectively).
Seeking advice from an IFA also remains a popular option for savings queries, with over a fifth (22%) making decisions based on professional advice. And while the newspapers have sometimes come under attack for their reporting on the financial crisis, they are still a trusted source of information for almost one in five Brits (19%) get their information on savings from newspapers, with men taking much more of a steer from their daily read (23% compared to 14% of women).
Hetal Parmar, Manager for Savings at Alliance & Leicester, said: "It's encouraging to see that, despite difficult circumstances, a good number of people have responded to the credit crunch by putting sensible measures in place, cutting down their outgoings and spreading their savings around. Our research also shows that people are trying to become more financially astute and many are 'doing it for themselves' by researching online, perhaps driven by the convenience and choice the internet offers. The rise of comparison sites and online personal finance forums has certainly made it easier to find a good savings deal."
The online revolution has certainly prevailed when it comes to personal banking, the Alliance & Leicester research reveals respondents place great importance on online account management for their saving savings, and also on online applications (70% and 61% respectively). Yet Brits still crave the personal touch when it comes to their banking. More than two More than twoo their banking. More than two thirds (68%) still value local branches and just over a third (35%) like to manage their account over the phone.
Over a third of those surveyed (35%) also reveal that they have different savings accounts for different purposes - allowing them to distinguish between short and long term savings goals.
Hetal Parmar continues: "Whether you go online, talk to friends and family or seek professional advice, it's important to have savings in place for a rainy day and to ensure your savings are working hard for you. Having a financial cushion in place is crucial, especially during this uncertain economic climate.
Alliance & Leicester offer a range of competitive savings accounts to suit all needs. For savers who prefer to manage their accounts online eSaver (5.00%) is suitable for long term savings, while Online Tracker (4.75%) offers instant access and Easy ISA (4.50%) is a great option for tax free savings.
For savers who prefer a branch-based account however there is RewardSaver, designed to offer a competitive return for lump sum savers. It combines a variable rate of 3.00% gross pa /AER, which is guaranteed to at least match the Bank of England Base Rate, with an additional fixed reward of 2.00% gross p.a. payable on 1 February 2010, if no withdrawals have been made from the account.
A&L recommends the following strategy for successful saving:
· First of all, have a pot put by for your day to day needs, this could be a current account with a high rate of interest, but make sure that you will be able to access the money without penalty as soon as you need it.
· Next, it really makes sense to have a rainy day fund and a good rule of thumb is to have about three months' income saved in it.
· Thirdly, if you want to save for any specific items such as a new car, holiday or wedding, set aside a specific pot for this - if you have a specific timeframe for saving, so much the better as you may be able to take advantage of longer term accounts with high rates of interest.
· And lastly, think carefully about your longer term financial needs and start building up a long term fund.
Further regional figures:
Making savings account decisions:
· Savers in Wales and the South West are most internet-savvy - 52% do their research on the internet
· Londoners are the most likely to have a conversation with colleagues, friends or family - 34%
· Londoners are also most likely to be swayed by newspaper articles - 24%