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Britons tap into savings in quarter

Britons made use of their savings in the first quarter due to rises in the cost of living and in taxes, according to a survey.

The study by PureProfile said the average person in the UK had £1,783 put away at the end of March, £100 less than in the same month in 2010 and 12 per cent less than the same month the previous year.

Higher living costs were blamed by the group for the fall in savings and the study revealed that 41 per cent of Britons dug into savings to pay for essentials such as food and fuel.

Job insecurity is also reducing the amount of money people set aside, as people use any spare cash they have to reduce their borrowings. Around 18% used savings to pay back debt, while 15% were not confident about keeping their job, a proportion last seen during the recession in the final quarter of 2009.

The research found that young people and those on low earnings were most likely to use their savings. The average saving level for people aged 18-24 dropped 40% over the past year to £496. Savings levels of those earning less than £22,000 a year fell 21% to £595.

:: PureProfile interviewed 1,300 people each month of the first quarter of 2011.

Copyright © Press Association 2011

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