Savings increase to highest level since 2004

Saving levels have increased for the third quarter in a row and are now at the highest level seen since 2004, according to a survey by National Savings & Investments (NS&I).

In spite of relatively low interest rates offered on many savings options, Britons are now saving 8.09% of their income, the equvialent to £104 a month on average, this is up from 7.33% of their income last quarter.

Younger individuals are shown to be leading the way with the average figure of 8.09% across all age groups rising to 9.29% for the 25-34 year old category.

The survey also recorded a drop in the number of people putting nothing away, down from 25% to 20%.

John Prout, from NS&I said:

"It is really good to see the average amount saved per month has risen over £100, especially as the cost of Christmas can often be felt for some time after."

Those with savings goals in mind saved £39 more per month on average than those without savings goals, £150.12 and £111.09 per month respectively. The survey suggested 42% of 25-34 year olds have savings goals, compared to an average of 28% across all age groups.

"Setting savings goals can help savers gradually build their pot to save for particular long-term targets and our research suggests that setting a goal enables savers to save an extra £39 each month.

The NS&I Quarterly Savings Survey suggested that typical savings goals include saving for a property purchase, property improvements or to pay off a mortgage (38%), saving for a special occasion or a holiday (38%) or saving for an emergency (26%).