Savings robust as credit squeezed
Savings robust as credit squeezed
Monday 2nd June 2008
Saving levels at UK building societies have hit new highs the global credit crisis endures.The UK's 59 societies took net receipts of £1,820 million in April this year, compared to £1,351 million in the same month in 2007.
The rise was largely funded by an increase in interest in ISAs, according to statistics from the Building Societies Association (BSA).
Building society net receipts to cash ISAs in April 2008 were £2,052 million. Again this compares to £1,773million in April 2007.
As the BSA explains, the ISA inflow is greater that the total sector savings inflow because some money will have been withdrawn from other savings accounts with building societies and redeposited into building society cash ISA accounts.
"Yet again building societies have attracted record savings inflows during April, continuing their excellent performance in the savings market," said Adrian Coles, director-general of the BSA.
"Savers are increasingly recognising the very competitive saving products that building societies offer represent excellent homes for their cash in these uncertain economic times.
"It appears that building society cash ISAs were particularly popular because of a less optimistic outlook for future stock market performance," he added.
In encouraging news for the sector the amount lent to consumers has remained relatively stable.
Gross lending amounted to £3,645 million in April 2008, compared to £3,768 million in April 2007. There were fears net lending would fall further amid growing concern for the UK property market.
"Gross lending was down just 3.3 per cent on the same month last year, and was similar to the level seen in March this year," said Mr Coles.
"Although approvals picked up slightly from March, they are still down on last year, and mortgage activity will be subdued in the coming months."
Net lending by building societies in April 2008 was £666 million, compared to
£1,114 million in April 2008.
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