Date issued: 14 Jan 2010

CONSUMERS CHOOSING TO SAVE LESS

• Importance of personal saving dipped in the run-up to Christmas.
• One quarter of people not saving at all.
• Nationwide would like to see consumers get back into the habit of saving after festive spending.
• A reduction in the frequency of saving, as well as more negative attitudes to current savings and the savings environment, have driven down the Savings Index by four points.

Importance of saving dipped in the run-up to Christmas

• Consumers see saving money as less important than they have in previous months, particularly when asked how important it is for them to personally save.
• Christmas shopping and the then upcoming VAT increase are likely factors in people seeing saving as less important.

Andy Hutchinson, head of savings at Nationwide, says:
"December is clearly a busier month for retailers, so there is no surprise that the importance of saving decreased in the run-up to Christmas. It is possible that this was also exacerbated by the fact that December 2009 was the last month before VAT increased back up to 17.5% from 15%, encouraging some customers to make those bigger purchases before the New Year."

One quarter of people not saving at all.

• Only 45% of consumers (a reduction of 4% from the previous month) save regularly.
• 25% of consumers (an increase of 1% from the previous month) are not setting aside any money at all.

Andy Hutchinson says:
"Discouragingly, the number of those who are saving regularly is at its lowest point since the Index began in May 2008. On the other hand, this could be because of seasonal fluctuations – as mentioned earlier – and we mustn’t forget that the Base Rate is lower now than it was 12 months ago. Nevertheless, it’s still worrying that a quarter of us are not saving any money at all."

Nationwide is now encouraging consumers to get back into the habit of saving after festive spending

• The fall in the Savings Index marks a disappointing end to 2009 for the Savings Index, which had seen relatively strong figures in the previous three months.
• The Index is now at a similar level to 12 months ago.
• The Savings Environment Index has risen by five points compared to November 2009.

Andy Hutchinson says:
"We know that December can be an expensive month for families, so I would encourage them to get back into a savings habit as quickly as possible in January 2010."

The full report can be found here. The Savings Index website can be found here.