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This spring, the amount the population is saving is higher than ever according to National Savings & Investments, proving that in the downturn saving is the very best practice.

On average, NS&I found that Britons are setting aside £92.41 each month, up from £90.12 in winter 2008. Those who regularly save are also putting away £209.23 a month this quarter, the largest amounts since the Government body began measuring saving habits four and a half years ago.

If that £209.23 is being invested wisely, in an offset mortgage for example, the long-term returns will be drastically higher.

This increase in both key measures of the population’s savings comes despite a small drop in income levels over the same period. In fact, across the population, the amount saved as a percentage of income has increased to 6.83% this spring. The number of people saving regularly has also remained constant for the fifth quarter in a row, with nearly half of the population setting some money aside each month.

It’s not just the fact that the UK is saving, but Britons saving by setting themselves the highest savings targets since the NS&I research began in autumn 2004. People ideally want to save £219.11, up from £210.26 last quarter and £195.67 this time last year. This is 16.2% of their average income, compared to 14.99% in spring 2008. People also appear to be keeping more careful control of their spending – less people are saying that they overspent each month, 28% this quarter down from 30% in spring 2008.

So people are planning their financial month more wisely. This is great news – the key to good money management, especially if you are managing an offset, is a careful, reasonable monthly plan.

Dax Harkins, senior savings strategist, NS&I says: “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. One way that people could tackle this is to identify clear goals to save for; at the moment just over a quarter of those with savings set aside are saving for something specific.”

SOURCE: NS&I, 24/06/09

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