Britons saving half as much

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Yellow Belt
Britons have nearly halved the amount they set aside during the past year but they are dipping into their savings less, a survey has showed.

The average person saved £329 during the three months to the end of December, down from £644 during the same quarter of the previous year, according to Birmingham Midshires.

But there had been a 40% drop in the amount of money people withdrew from their savings accounts during the past three months, with this falling to £302 from £506 in 2007.

Only 9% of people raided their savings to buy luxuries during the final quarter of 2008, compared with 39% a year ago, while there has also been a steep drop in people spending their savings on holidays and going out.

Instead, 22% of people who dipped into their savings did so to pay for emergency repairs to their car or home, while 12% were lending money to family and friends and the same proportion needed it to pay unexpected utility bills.

One in five people also had to fall back on their savings after overspending on their current account.

Tim Hague, director of savings and investments at Birmingham Midshires, said: "The latest data from our Saving Britain research shows that there has been a marked reduction in the amount people are raiding from their savings and a shift in the reasons for doing so.

"Those who are raiding their savings are doing so for essential reasons such as emergency repairs and increased utility bills rather than spending on luxury items."

A holiday is the main thing that people are saving for at 27%, while 26% are setting money aside for a rainy day and 15% are saving towards their retirement.

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