It’s been a while since we were able to report an increase in savings from the ING Direct Consumer Savings Monitor findings, but we now know that cash reserves rose by just over £70 in the final quarter of 2011.
Consumers have also made good on their promise to limit the use of the plastic over the festive period, a resolution that we identified in previous research. This has led to a fall in the average level of unsecured debt, by a hefty £400, and according to our figures, now sits at a three-year low.
Looking at our consumer confidence figures, it seems that it was the negative economic headlines and personal experience that pushed people towards this more prudent financial behaviour and heightened their determination
to restore savings.
And while retailers had to ‘wait out’ a relatively quiet October and November while consumers put cash away for Christmas, it seems some were rewarded in December with healthy Christmas sales.
However, when looking at the year as a whole, savings levels remain 14.2 per cent down on the previous year (without accounting for inflation), sitting at £1,574. This figure is also a great deal less than the £2,020 balance we recorded when we first began tracking savings at the start of 2009.
Particular groups are also suffering, with middle-aged savers seeing their savings fall significantly in 2011 and low-earners with median balances at a trough of just £397 – the lowest level we’ve seen so far.
It does appear that the public are sufficiently concerned that many have made saving their number one financial priority, although with the current economic environment, it remains to be seen whether they can continue to build these balances in 2012.
