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Savers withdrew more money from building societies in June than at any other time since records began, leaving mutuals with a £2.2 billion outflow over the month, according to figures published today by the Building Societies Association (BSA).
The previous high of £811 million withdrawn in April has been dwarfed by June's data, which show the most savings taken out of building societies in over 50 years.
The BSA blamed the figures on Britons paying off mortgages. Brian Morris, head of savings at the trade body, said: “With rising unemployment, subdued income growth and the official bank rate at an historic low, it is very difficult to attract retail savings.
“Households are looking to take advantage of the low interest rates to pay off debt rather than save. These conditions are expected to persist into 2010.”
The BSA also published figures on mortgage lending today, which hit £1.98 billion in June, up almost a third on May, but still 40% lower than the £3.25 billion recorded at the same time last year.
Reader views (5)
How safe are building societies? Not very I would think because our underlying economic situation is so bad. Yes, take your money out and pay off your debts while you can. Don't be fooled by false optimism and silly talk of the green shoots of recovery by those with a vested interest in talking up markets, like estate agents and politicians. The reality is that the government's financial stimuli are wearing off and the economy is about to collapse again as further adrenalin shots are impossible because of the parlous state of the public finances (a consequence of Brown's and Darling's incompetence). The utter madness of quantitive easing isn't working, banks are still not lending (they won't because they know their finances are more debauchced than they admit by dealing in pernicious derivatives), unemployment is climbing and there will soon be a currency crisis. Moreover, German industrial production has nose-dived and unemployment in the US is soaring inexorably as other indicators worsen. And wwhat can be the future for Britain with our two biggest earners failing: North Sea Oil is running out rapidly and the banking sector is now crippled. Immigration is still uncontroled as illegals are increasingly a tax on public services - over a million are receiving NHS care at massive cost to UK taxpayers. When will that nettle be grapsed by the tough talking Mr Cameron?
- Richard Kennard, Welling, 30/07/2009 08:20
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And the poor rates building societies offer.
- Maggie, London UK, 29/07/2009 16:09
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I am only surprised that some savers have money still left in Banks and Building Societies accounts.
The wise savers withdrew theirs long ago.
Pay off all your debts, you savers; and never borrow again, is my advice to all savers; they need you; you have never needed them.
Neither a lender nor borrower be: if you ain’t got the cash, go without, till you have.
- Mickinlondon, london., 29/07/2009 16:07
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So the Building societies paid £2.2 Billion back to savers and also lent £1.98 Billion to mortgage holders. Makes one wonder what Darling is winging about. Seems like the building societies are still lending at unsustainable levels, unless we all start saving more.
- Billg, Gerrards Cross, 29/07/2009 15:45
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This piece makes the point for millions of savers - it ain't worth the candle. I mean, why save?
Savers - the great unprofligae - did their bit to help the banks and building societies to lend money to, among other, profligate houseBUYERS. Savers then had their interest stolen by the lenders to lend even more money to profligate houseBUYERS, and those on Tracker deals are laughing into our faces.
But there will be a correction - a horrifying correction - it's out there and it's coming like a tsunami. Bring it on!
- Ted, London, 29/07/2009 14:48
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