As the housing market switches into a different gear, see our story today, House prices fall £4000 in five weeks, another report today indicates saving and investing is set to soar. Both events seem to be related to a 'trigger point' in interest rates.
Savers are taking advantage of the recent rises in the UK’s base rate and plan to save an average of £105 a month this quarter – an increase of nearly 20% on the £88 that people were putting away in quarter two of this year, according to Alliance & Leicester’s wealth tracker index.
The findings follow a series of interest rate rises, which have left the base rate standing at 4.75% and show that consumers have clearly woken up to the positive side of base rate rises.
Additionally, consumer confidence in the stock market is also on the increase, as Britons plan to invest £28 each month, an increase of over 50% on the £18 a month in quarter two this year.
As part of its quarterly study, Alliance & Leicester’s 13th Wealth Tracker Index asked a GB representative sample of 2,000 people what their level of disposable income was each month and from that figure, how much they plan to save, spend, invest or supplement by borrowing.
Saving
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People are saving an average of £105 each month – an increase of nearly 20% on the £88 they were saving per month last quarter.
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People are saving 29% of their total monthly disposable income.
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Men are saving £13 more than women at £111, compared to £98.
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Investment levels have increased from quarter two – Britons plan to invest £28 each month, an increase of over 50% on the £18 a month in quarter two this year.
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This equates to 7% of the average disposable income.
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Men plan to invest £13 more than women at £35, compared to £22 each month.
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The average monthly disposable income (excluding borrowing) stands at £366 – a £72 increase on last quarter.
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Wealth Tracker found that Britons are spending 64% of their disposable income, or £233 each month – more than the £188 they spent last quarter.
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Men are spending more than women - £255 compared to £209.
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Borrowing levels have increased since last quarter, when people were borrowing an average of £46 each month, compared to £103 now.
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Men are borrowing almost three times as much as women, at £153 compared to £52 a month.
Regional findings:
People in the South West expect to save the most this summer, an average of £138 every month. Northerners expect to save the least, £55 every month.
South Westerners are also the most likely to invest the most each month this quarter, an average of £76. People in Yorkshire will invest the least, an average of just £2 per person each month.
The Welsh plan to spend the most this summer, at an average of £313 each. This compares to people in the East Midlands who expect to spend the least, £158 per person each month.
People in the South West will borrow the most this quarter, an average of £235 each month. East Anglians will borrow the least, less than £1.
Sarah Ennion, Product Manager for Investments at Alliance & Leicester said: “It is encouraging to see that people are taking advantage of rising interest rates and improving stock market performance and choosing to save and invest more of their money every month."
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