Third of Britons 'using savings as costs rise'

More than a third of Britons have dipped into their savings during the past six months as people struggle to meet the rising cost of living, a survey indicated today.

Around 36% of people said their savings had decreased during the six months to the end of September, with the average person withdrawing 16.5% of their nest egg.

The latest decrease in savings levels follows a 10% fall during the previous six months, according to Investec Bank.

The main reason people gave for raiding their savings was needing to cover the cost of living, cited by 40% of those who withdrew money, followed by the need to pay for a significant purchase, such as a car, at 28% or a holiday, at 27%.

But a fifth of people said they had used the money to pay off or reduce debts, while 8% had lent money to family or friends. The same proportion had given cash to family or friends.

Other reasons for withdrawing cash included investing it or paying it into a pension, and giving it to charity.

Linda McBain, head of banking at Investec Bank, said, "Although thousands more people are withdrawing significant cash deposits just to cover day-to-day living expenses, it's also crucial that people maintain appropriate savings to cover the requirements of their current stage in life."

People in London were most likely to have withdrawn money from a savings account to cover the cost of living during the period, at 51%, compared with just 29% of people in the North West.

:: Research Plus questioned 1,017 people during September.