The Bank of England has warned that it could take almost ten years for savers to rebuild their wealth in the wake of the credit crunch. The central bank commented that if householders were able to deposit 10 per cent of their income into a savings account each month, it would take nine years to restore wealth to the average level of the last 20 years. The BBC recently revealed that UK households saw their wealth fall by an average of more than £30,000 last year.
Prior to the credit crunch, the ratio of household saving to spending fell to historical low levels. The easy availability of credit, rising asset prices, economic stability and falling interest rates contributed to a feeling that it was better to spend than to save.
The economic volatility of the past two years, however, has changed this. While the banks latest quarterly report offered no clear guide to the amount that savers may put aside, it is certain consumers will be keeping an eye on the latest savings account deals. A fear of rising interest rates and of future tax increases may contribute to an increase in precautionary saving, the report forecast.
Bank of England Warns Savers to be Patient
Financial Services > e-banking > Banking news
Bank of England Warns Savers to be Patient
Wed, 23 Sep 2009
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