Savings Shrink to Supplement Income
Recent research conducted by Schroders, revealed that approximately a third of Brits have withdrawn funds from their savings and investment accounts to top up their income. Nearly £60 billion in total were withdrawn in the course of last year, with an average amount of about £4,600 per accountholder. One third of people aged over 65 have tapped into their savings and relied on their investments, to supplement their pensions for everyday expenses.
Commenting on the finding, Robyn Stoakley, Managing Director of Schroders Intermediary Business, said: “The amount of capital being drawn down suggests that it is not just rainy day funds that are being drained, but a significant proportion of individuals’ long-term savings.”
The report findings suggested that people nearer the retirement age were more likely to dip into their savings than any other group, which is very worrying, as this age group may not be able to rebuild their savings later as easily. In addition, Schroders analysts anticipate that the number of pensioners using their savings in addition to their income will increase as a result of new proposals to tie private pension growth to the Consumer Price index.
These findings were confirmed by a poll, conducted on the website moneysupermarket.com, where 56 percent of responders admitted accessing their savings accounts when they didn’t plan to do it and 26 percent agreed that they will tap into their savings if required.
Commenting on the results, Claire Francis, editor of moneysupermarket.com, pointed out the importance of saving and suggested exploring other options reducing the strain on family finances.
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