One in two dip into savings to pay regular bills, says new research

New research¹ for Investec Bank, a leading international financial services provider, reveals almost half (47%) of savers dip into their accounts to help meet regular bills, such as their energy, water and other utility bills as the cost-of-living crisis continues to bite. Of these, 16% said their savings are “extremely” important in helping them meet their regular bills and around a third (31%) said they’re “quite” important.

Nearly two out of five (38%) use their savings to help pay energy bills, while 30% use savings to help pay car insurance, and around a third (29%) to help pay for car servicing and maintenance. More than a quarter (27%) use savings to help pay for their water or other utility bills.

The research shows that many people are having to dip into their hard-earned savings on a regular basis. Around a third (34%) are withdrawing money from their savings every three months or less, with 16% making a withdrawal at least once a month. Around one in 10 (11%) withdraw from their savings every three to six months, and one in seven (15%) withdraw cash from their savings every year or more to pay bills.

Worryingly, the research shows that having dipped into their savings many believe that they then won’t be in a position to build them back up. Around one in six (17%) said once they withdraw money from their savings, they never replace it. Of those who do, it takes an average of over six months to build up their savings to where they were. More than one in 10 (11%) say it will take a year or longer to replace them.

David Hunt, Head of Retail Savings at Investec Save, said: “It's concerning to see a trend of people having to use their savings to pay for regular monthly bills. This points to the reality of the cost-of-living crisis – those who might have previously been saving up for something special, perhaps a deposit for a house, a holiday or a wedding, are now having to spend their savings on household bills and other everyday items.

“It’s even more concerning how many people aren’t in a position to repay what they’ve taken from their savings, even over a number of years. This means it's even more important to make sure that your savings are working as hard as possible for you, with the best possible rate, in an account that best suits your individual needs.”

Investec Save’s 90-Day Notice Saver gives savers a higher rate of interest than its instant access account and no fixed term. It enables customers to save as well as to pay for bills they know are coming up, as they can access savings at any time with unlimited withdrawals by providing 90 days’ notice before withdrawal.

Investec Save’s 90-Day Notice Saver also gives least 104 days’ notice before reducing the interest rate on the account. In the event of a rate decrease, this gives consumers enough time to make a change if they wish ensuring that they are in control.

Investec Save offers a range of accounts, which do not have any penalty fees or hidden bonus rates, including its Online Flexi Saver and Fixed Rate Saver offering 1-Year, 2-Year or 3-Year terms.  The Online Flexi Saver is a simple and secure instant access savings account, provides instant access to savings, and allows unlimited deposits and withdrawals to a linked current account. This also makes the Online Flexi Saver perfect for unexpected bills that might arise, such as car maintenance or a vet’s bill.

The Fixed Rate Saver provides simplicity and security for savers. Interest is paid on maturity on the 1-Year and annually on the 2-Year and 3-Year. No withdrawals are permitted until the end of the term, and no further deposits can be made after the first seven days.
 

¹ Investec Bank commissioned Viewsbank to survey 1,106 adults aged 18-plus in June 2024. The sample represented the demographic profile of the UK. Some 82% or 903 people surveyed said they have one or more savings accounts.
*AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once a year. The AER is intended to be an indicative rate to help you compare the return on different savings products.