11 Feb 2012

Britain’s economy struggled to recover in 2011 and the country is now teetering on the edge of a double-dip recession, with higher than wanted inflation and rising unemployment. Against this uncertain backdrop, Britons are continuing to feel the acute strain on their finances. A new report out by HSBC called the HSBC 2012 Savings & Investment Report reveals how continued economic instability has impacted the savings habits of UK savers. It uncovers how much the average Briton has in savings, how their portfolio is made up and what their savings habits have been in 2011, as well as looking at their savings intentions for the coming year.

In 2011, several factors may have affected savings habits in Great Britain:

• Rising inflation; CPI inflation did not fall below 4.0% in 2011, 2% above the Government’s target, and peaked at 5.2% in September.
• Low interest rates; the Bank of England has held the base rate at 0.5% for 34 consecutive months. While interest rates on savings products have risen slightly this year, they still remain significantly lower than in previous years.
• Rising unemployment; the number of unemployed people is currently at its highest level since 1994 at 2.64 million.
• Lower disposable income; the latest ONS data shows that earnings were just 1.2% higher in 2011 than in 2010 at a time when annual inflation reached 4.8%, meaning that income is not rising in line with inflation and instead consumers are 3.6% out of pocket in real terms.

This report from HSBC provides an up to the minute picture of Britain’s savings and reveals the disparity in savings habits and intentions between genders, generations and regions.

Bruno Genovese, Head of Savings at HSBC, comments: “2011 was a tough year for savers given the financial climate, but it is positive to see the substantial effort made by consumers to save in spite of this. While this year is also likely to prove a challenge for British savers, intentions to save remain high with people aware of the need to build up a savings cushion in case of a rainy day or to achieve their long and short term goals. These findings suggest that Brits will save where they can afford to in 2012.”

download-the-hsbc-savings-map-of-britain-report-2012.pdf