The amount Brits are stashing away in easy access savings accounts rose by an unexpected 18% in the first quarter of 2012.
The average savings balance is now £1,858, up by £284, according to the ING Direct Consumer Savings Monitor. The rise also marks the first consecutive quarterly rise in savings since 2009, indicating a reversal in the three-year trend of falling savings levels.
One of the main reasons for the rise has been the start of payment protection insurance compensation payouts. An estimated two million people are expected to receive payouts of around £2,600 this year. ING Direct estimates that one third of these funds will end up in savings accounts.
However, for most savers it has been careful spending that has meant they can increase their savings levels - it’s no coincidence that high street spending was subdued in the first quarter.
"Our research told us that ordinary Britons saw restoring savings as their top financial priority for 2012, but in the current climate we thought it would be tough for them to deliver on this," says Richard Doe, ING Direct chief executive.
"Six months of relatively restrained spending may not have helped the economy in terms of GDP growth, but it has allowed Britons to deliver on their determination to restore their savings."