Rate rises 'force people to save'
Published On 15 July 2007
Five interest rate increases since August 2006 have forced people in the UK to curb their spending and begin to save, new research suggests.Legal & General's latest MoneyMood Survey found that 62 per cent of adults were in the mood to save at the end of June.
This is a slightly higher figure than at the same time last year, when 60 per cent of people were planning on saving.
Unsurprisingly, high costs of borrowing also meant that fewer people said they were in the mood to spend - as this figure reached its lowest level in three years.
"It's hardly surprising that MoneyMood figures show we are in ‘save’ mode compared to three years ago," explained Julia Clayworth, of Legal & General.
"MoneyMood also found that the percentage of households who said they have money to spend after paying bills and debt payments has fallen to from 57 per cent from 61 per cent over the last 12 months.
"That would suggest more households are finding themselves in a position where they are struggling to make ends meet compared to a year ago when rates were down at 4.5 per cent."
Recent figures from unbiased.co.uk showed that UK consumers were borrowing 41p for every £1 they saved.
