‘Only The Wealthiest Consumers’ Can Afford To Open A Savings Account
As the economy slips into recession, only the wealthiest consumers can afford to open a new savings account or rather save money, new research suggests. According to AXA, over 20 million households have been spending more than they are saving since the beginning of the year. Its figures show that only those earning over £70,000 a year, or more than £52,785 after taxes, have been able to achieve a positive savings ratio in 2008. Consumers earning less than this have seen their savings eroded by higher mortgage costs, bigger utility bills and other essential monthly outgoings.
The reality of the economic downturn is being felt in homes all over UK. If only the richest members of society are managing to cope with their spending then banks, credit unions, insurance companies really need to consider how to improve the day-to-day financial health of British households.
AXA’s figures show that, perhaps unsurprisingly, consumers in the lowest income bracket – earning less than £12,420 after taxes have the lowest savings ration. However, even those bringing in a post-tax income of between £35,000 and £52,000 have failed to achieve a ositive percentage.
Rising prices are not only having an impact on the amount people can put into savings accounts – they are also eating into the deposits already invested. Abbey warned recently that consumers would have to top up their savings by an extra £78.60 a year to earn any real interest on their money.
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