How your savings could help the economy

Article Written By: Noelmellor

If you are one of the many people that make regular payments into a savings facility, you may be well placed to recommend others do the same having seen what it can do for your financial stability. Whether it's for a specific purchase or part of a backup plan for unexpected expenses, you might also find that as the economic slowdown becomes a thing of the past, your safety net puts you in a stronger position for the future.

In fact, with more money available to spend on a new car, a deposit for a house or some other big ticket purchase or outlay, savers who have continued to be careful with their cash could be doing the country a big favour further down the line. A study conducted in January this year highlighted the fact that, despite recent economic difficulties, people are still putting their faith in having an effective savings account. Conducted by YouGov, the research seemed to suggest consumers had not let the recession impact their savings and in fact, numbers were looking much more positive than they were 12 months beforehand.

It was revealed December 2009 saw the average UK saver put around 136% more into their nest egg than in the same month the previous year. This worked out at approximately £776 being put away by these people during the final quarter of the year - a significant increase on the £329 being saved the year before. However, 38% of people admitted they had dipped into their stash on at least one occasion - but the average amount involved in this moment of weakness was also much lower than it had been in the past.

But it is not just traditional savings accounts where people are finding a way to make their funds work harder for them - and as the new tax year arrives, more savvy savers might find themselves looking for the best cash ISA option for their money. From April 2010, the amount that can be held over a 12-month period in such a facility has been upped for all holders to £5,100 from the previous £3,100 figure.

This all means that there is now more chances than ever to make tax efficient savings for those who want to try and make the most of their funds. In addition, these changes extend to stocks and shares options, with an allowance of £10,200 now available to put into such a product, provided the holder has not put anything into a the latter type of ISA.

About the Author

Noel Mellor - money saving tips are especially focused around fixed rate ISAs best savings accounts.

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