People 'are dipping into savings for luxury items'
Published On 31 October 2007
Many people in the UK are risking debt and the possible need for an IVA in the future by dipping into their savings to purchase luxury items, a new report has warned.Consumer website moneysupermarket.com found that two thirds of people who save saw no problems with dipping into their savings for special treats.
This is despite the fact that 54 per cent of people said they were saving to give themselves piece of mind about their future financial situation.
While people are happy to use their savings to purchase luxury items, just 56 per cent use this money to tide over short-term debt problems.
"It's interesting to see many savers full of good intentions can't resist a sneaky dip into their cash to treat themselves - and that treats take priority over necessities that can't be planned for, such as a car repair or a washing machine to replace the one that's just packed up," commented Kevin Mountford, head of savings at moneysupermarket.com.
"There is no harm in this as long as there is an element of control - constantly dipping in will leave saving a pretty defunct purpose, and those hoping for peace of mind or a wealthy future may find the prospects of this much reduced."
Earlier this year, an expert from St Edmundsbury Financial Services said that people should always try to have between three and six month's salary saved in case of emergency.
