Savers who splash out on treats warned to be more savvy
01 November 2007
Two thirds of people regularly allow themselves to dip into their savings to buy treats, despite the fact that the majority of savers admit that they are saving their money for a specific reason.
Many people squirrel their hard-earned money away to provide peace of mind (54 per cent) and to save for the future or for their retirement (53 per cent), a survey by moneysupermarket.com has found.
More than six out of ten of 45 to 54-year-olds who are careful with their savings are doing so for the future, while 50 per cent of 18 to 24-year-olds hope to fund a holiday or car with their savings.
What's more a savvy 28 per cent of 18 to 34-year-olds are putting their money away to buy a house - a clever move, given current rising house prices.
Kevin Mountford, head of savings at moneysupermarket.com, said: "It's interesting to see many savers full of good intentions can't resist a sneaky dip into their cash to treat themselves - and that treats take priority over necessities that can't be planned for, such as a car repair or a washing machine to replace the one that's just packed up.
"There is no harm in this as long as there is an element of control - constantly dipping in will leave saving a pretty defunct purpose, and those hoping for peace of mind or a wealthy future may find the prospects of this much reduced.
However he added: "My concern with the number of people dipping into their savings is a number of these headline rates drop to appallingly low levels when withdrawals are made.
"This is more worrying as we approach winter when people might turn to their savings to pay for increased fuel bills or Christmas presents. People should check the conditions of their account before they take the plunge and consider if they really need to withdraw the cash from their savings pot."
