Brits eat into their savings as financial squeeze bites

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Britons put just £4billion into savings accounts in February, down sharply from £7.2bn in January. That is a massive fall compared to last year, when Britons saved more due to lockdown, putting away £18.5bn in January 2021, and another £17.1bn in February.

Many households have no spare money right now, AJ Bell head of personal finance Laura Suter said: “Rather than building their savings they will be eating through them as ‘awful April’ hits and the squeeze on all our incomes ramps up.”

David Gibb, chartered financial planner at Quilter, said: “The days of people putting record amounts into savings and paying down debts seen during the depths of the pandemic appear well and truly over.”

This is a blow as this year’s Isa “season” draws to a close, yet people should still try to put some money aside if they can.

Saving something is always better than saving nothing at all, said Tim Bennett, head of education at Killik & Co.

“The power of compound growth over long time periods means even a small amount, paid on a regular basis, could make a huge difference to your future choice, independence and security,” he said.

Isas are attractive because all your returns are free of income tax and capital gains tax, while younger savers who take out a lifetime Isa get a 25 per cent government bonus worth up to £1,000 a year, on contributions of up to £4,000. But the clock is ticking.

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