Experts see savings shift

09/07/2009

Financial experts have seen a profound change in the way Brits save and spend, caused by the credit crunch and recession.

Consumers are now putting away larger amounts in savings accounts, paying back their debts and tightening their belts when it comes to splashing out on luxury items, the BBC reports.

Prior to the onset of the financial crisis in 2007, the opposite trends were observed - with people building up almost £1.5 trillion of personal debts.

Young people were also identified as having made the biggest changes to their financial habits.

Speaking to the broadcaster, economist and author Graham Turner said: "The savings ratio is moving back up, it's now up to about four to five per cent and I think that we're going to see it move up over the next two to three years."

Dax Harkins at National Savings & Investments, the government-backed savings account provider, added: "The big surprise from our perspective was when we looked at the 25 to 34-year-olds.

"We generally look at these people as footloose and fancy-free, but we've seen these as the best savers of the last quarter."

The BBC also got the advice of Gillian Tett of the Financial Times - who is widely seen as having predicted that a financial crisis similar to the credit crunch would occur, years before it began.

"Don't load yourself up with debt, don't start chasing after every new financial fad," she said.

"Remember that if something seems to good to be true, it almost certainly is."

Tags; Budgeting Advice, Credit Card Lifestyle,

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