Saving culture on the decline!

UK savers spend more than they need to, and eat into their nest eggs.

09:50 31 December 2013

Astounding figures point out that people no longer believe in piggy banks and saving money in mattresses. The trend of late has been a swarm of people have consistently emptied out their nest eggs. And rarely will you find people putting money in their accounts. The idea of collective savings has been on the decline and the trend does not seem to look up any time soon.

• The shift to instant access saving accounts and current accounts

Putting money into your savings accounts meant that you could not access it until a certain period elapsed. Current accounts and instant access accounts are valued because people could readily access their money.

Another reason for the shift from saving accounts is that they have very low interest rates. It was forecasted that interest rates would be non-existent. Considering this state of events, people have gravitated towards alternative investments as they promise a significant rate of return.

• Novel systems of lending are in force

Peer to Peer systems of lending have grown in popularity in recent times as lenders offer terms that are have high rates of returns. The success of such systems has been attributed to strong management that ensure investor protection in case of “economic bumps” along the way.

• More and more risky investing

More and more people are subscribing to the motto the “greater the risk the greater the return and investing in shares”. Granted that share prices can drop steeply and you can end up losing a great deal of money, but if it is done well, the returns can be very satisfying as well. Also people are taking the plunge into corporate bonds which offer a greater return on investment.  A lot of people are in essence putting their savings in stocks and bonds as long as the margin of success is there.