Saving reaches highest level for five years

The amount we are saving has reached its highest level for nearly five years as people worry about the security of their jobs, research showed today.

People set aside an average of £92.41 a month during the three months to the end of May, the most since National Savings and Investments began the research in 2004 and up from an average of £90.12 a month during the previous quarter.

Those who set aside money on a regular basis also saved record amounts at £209 a month, with the proportion of regular savers remaining static for the fifth quarter in a row at 47%.

It is not just the amount that people are paying into deposit accounts that is up, with savings aspirations also increasing to a record high.

People hope to save an average of £219 a month during the coming quarter - the equivalent of 16% of their income - up from £196 during the same period last year.

The focus on savings is being driven by fears about job security, with 54% saying they were setting aside money for an emergency, such as being unemployed.

At the same time, people are keeping a closer check on their spending, with 28% of people admitting they had overspent each month between March and May, down from 30% during the previous quarter.

Dax Harkins, senior savings strategist, NS&I said: "Many of us are cutting back on unnecessary spending and instead are putting a priority on saving, as saving for an emergency continues to be the number one reason for putting money aside.

"Our survey shows people are setting themselves their highest ever savings targets. However as we've seen previously we are still falling a long way short of our aspirations."

The average amount that people have saved increased to £18,443 in May, up from £17,372 in February.

But 32% of people said they did not think they had enough money saved for an emergency, while 39% admitted that they thought they would be less likely to save during the coming months.

:: TNS questioned 3,006 people between March and May.