New research from Santander shows that Britons are planning to withdraw over £6 billion from their savings to cover the cost of Christmas this year.
The news will mean that the nation’s savings pool will be diminished further and potentially have an impact on the savings ratio. Santander found that one in seven people (14%) will be withdrawing almost double the amount (average of 44% more) from their savings this year compared with last Christmas.
Of the third of people withdrawing an average of £391 from their savings over the festive season, around three quarters (74%) say they will use the money to buy presents. Almost one third (31%) of those intending to withdraw savings say they will be forced to use the money to meet the rising cost of energy bills.
Even if consumers are increasingly tapping into their savings, it important that they get the best rate possible on their remaining money.
A dent in nation’s savings pot
Matt Hall, head of savings, Santander, said of the findings: ‘The festive period is usually an expensive time, with many people dipping into their savings to cover the cost of presents as well as increased winter bills, and this year looks set to make a significant dent in the nation’s savings.
‘For many people, even those who have money set aside in the bank for a rainy day, accessing savings to cover costs over and above their usual outgoings is difficult.’
Paul Davies, analyst at Which?, added: ‘This latest survey seems to suggest that many people are struggling to make ends meet this Christmas and are increasingly relying on their savings. A reduction in the savings ratio isn’t good news for the future economy, although it’s arguably better than shoppers paying for Christmas 2011 on credit.’
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