Holidaymakers raid savings to the tune of £1,666

17 July 2014

Savers are raiding their accounts twice as fast as they pay into them, research from Halifax has found.

In the three months to June, savers were forced to take £1,666 out of their savings to pay for unexpected costs or bills, a time during which they only managed to deposit £803 in their accounts.

Londoners took the most from their savings (£2,306) but they also saved the most (£1,164), while the region with the greatest proportion of savers was the east of England, where 83% of residents save money. At the other end of the spectrum, in the East Midlands only three-fifths saved – the lowest proportion of any region.

The number one reason for raiding savings was to pay for a holiday or weekend away, as cited by 19% of savers. Halifax's research put the average cost of a holiday abroad at £1,404 per person, up 7% compared to last year.

Other reasons given for depleting savings accounts included emergency home or car repairs (16%), loans to family and friends (11%), gifts (10%), unexpected bills (10%) and overspending on current accounts (10%).

Meanwhile, other than putting something aside for a rainy day (33%), the things people said they were saving for were a holiday (26%), retirement (19%), house deposit (11%) or car (9%).

Overall, while the number of people forced to raid their accounts in the three months to June rose two percentage points to 37% (compared to the same time last year), the amount withdrawn was 9% lower.

Additional pressures

Richard Fearon, head of Halifax savings, says: "Summer is typically a time when we see people dipping into their savings, as the cost of holidays put additional pressures on every day finances. While many have specifically saved for their holiday over the year, it seems that they may also be underestimating the cost. As a result, the nation's savings pots have been unexpectedly raided to make up the shortfall.
"However, the fact that a greater number of people are saving, and regularly putting money aside, is encouraging, and means that they are likely to be better able to cope financially when those unexpected costs arise."

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