Survey: Most sceptical about saving

23 January 2009 12:08am

Saving money is no longer worthwhile according to nearly three-quarters of consumers, a survey found.

Most adults are sceptical about saving, with 73% saying that the benefits of putting money aside have fallen during the past year, the Association of British Insurers (ABI) said.

Consumer confidence in savings has been rocked by plummeting returns, as interest rates dived to a record low in December.

Deposit accounts now pay average interest rates of less then 1% - the lowest since records began in 1995, according to recent figures from the Bank of England.

The ABI survey also found that 70% of adults believe that the economy will deteriorate further during 2009.

Only 7% of the 3,000 people questioned felt that the benefits of saving had risen over the past year, compared to 15% in the same survey in the third quarter of 2008.

Dr Rebecca Driver, the ABI's director of research and chief economist, said: "The current economic climate vividly highlights the dangers of too much debt - the country needs to develop a healthier approach to saving.

"Yet our research shows that consumers are becoming increasingly sceptical about the benefits of saving.

"Increasing ISA limits and bringing forward automatic enrolment into existing workplace pension schemes will help, and we urge the Government to take action on these issues."

© The Press Association