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Saving level in UK 'decreases'

The deposits and savings level in Britain's banks has dropped in May, according to the British Bankers' Association (BBA).

The banks have witnessed an increase of just £100 million in the last month, down from £800 million in April and the average of £1.9 billion over the previous six months.

According to the report, the low saving level suggested that homeowners are remortgaging and spending their spare cash to repay their personal loans despite facing a squeeze in income.

The number of remortgage approvals recorded by the banks has also fallen amid diminishing hope of a hike in interest rates.

The figures revealed the number of approvals for remortgages in May was down to 21,519 when compared to an average of 24,571 for the previous six months.

However, house purchase approvals were slightly higher than in April at 30,509 but 15 per cent lower than last year.

Earlier this year the banking groups, accounting for two-thirds of all UK mortgage lending, had seen more activity as people were looking to fix costs with the hope that the interest rates would rise from a record low of 0.5 per cent.

Copyright Press Association 2011

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