Savers cutting back because lack of real return

Piggy bankDisgruntled savers are cutting back on the amount they are putting aside each month due to the lack of a real return on their cash, a study suggests.

About two in five households said they can afford to save each month but the average sum put aside has dropped to £71 across the UK, down 24% from £93 when a similar study was carried out in January, Legal & General's MoneyMood survey found.
While two in five households said they can afford to save, only one in five told the study they intend to add to their savings over the coming month.

This share is down on the same period last year when a quarter of households said they expected to add to their savings.

Savers have struggled to find accounts to give them a real return on their money amid high living costs and three years of record low interest rates.

Mark Gregory, Legal & General executive director, savings, said: "We are seeing savers becoming disgruntled with the rate of return they are getting as the gap between interest rates and the rate of inflation looks set to remain at current levels for some time yet.

"In our survey, two out of five (37%) said they would like to see some extra income from the money they have saved.

"The result is less saving - our figures indicate that the number of households who expect to add to their savings each month is only around half the level of those who can afford to save."

About 1,000 people took part in the study.

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