Britons won't save bonuses

Rather than using a pay rise or a bonus as a chance to put some money away for the future, the majority of Britons will have already mentally "spent" the money before it reaches their bank accounts, Alliance & Leicester has claimed.

The bank's research shows that of the 17 per cent of workers who will receive a cash bonus this year, 40 per cent will spend the lot, while more than a third of these say that it would need to be twice the size of present levels before they would consider saving any of it.

Only seven per cent of people save their whole bonus, with 48 per cent of women and 34 per cent of men blowing the whole lot on items such as credit card bills, holidays or gadgets.

When it comes to pay rises, more than 54 per cent say that it just gets swallowed up by day-to-day spending, with 37 per cent of those who don't save saying that they'd need a pay rise of six per cent or more before considering putting some aside.

Manager for savings at Alliance & Leicester Ross Dalzell said: "It's amazing that all the hard work that goes into securing a bonus or pay rise can be spent in just an instant.

"Whilst it is perfectly normal for people to want to treat themselves after receiving a hard-earned bonus, it would make sense to put at least some of it by in a savings account and not to blow it all on impulse purchases."

"Phenomenal" response to Islamic savings accounts

The response to the new range of Islamic savings products in the UK has been "phenomenal", a bank has claimed.

According to the Islamic Bank of Britain, around 5,000 new customers per quarter are choosing the products, which comply with Shariah law.

Mr Junaid Bhatti, a spokesperson for the bank, explained that the accounts allow customers to put savings in them, which is then placed in low-risk, Shariah-compliant investments.

Any profit that is generated from the investments is then shared with the customers at a pre-agreed ratio.

The bank says that it was the first to introduce Islamic savings accounts to the UK as well as being the first to pioneer unsecured personal financing in this market.

Robin Gordon-Walker, a spokesperson for the Financial Services Authority (FSA), stated that Islamic mortgages had come under its regulation in April and the organisation was now looking at Islamic insurance.

He commented: "We do consult with Islamic scholars when we are planning our regulation to ensure that what we are doing will allow them to act Shariah-compliant…but also meet our requirements."

Insurances Limited “Any move to help savers is a good move and I am sure the success will be as great as that associated with the Islamic Mortgage Market. We are awaiting the launch of the Islamic Insurance market with enthusiasm.”

Brits favour fast-access savings

Britain's 'have-it-now' culture means that many are opting for instant-access savings accounts over other savings plans, according to a new report.

Research from Birmingham Midshires found that 51 per cent of British savers have opened an instant-access savings account in the last three months, while less than 16 per cent are prepared to lock their funds away.

Women are more likely to want fast access to their cash than men, with 56 per cent and 46 per cent opening an instant access account respectively, while men are twice as likely to take advantage of the tax benefits of an individual savings account (Isa), which represented a third of men's new accounts and 16 per cent of women's.

The study also found that men are more likely to put their money into a fixed-rate savings bond, with 17 per cent of men and six per cent of women opting to do so.

Jason Robinson, director of savings operations for Birmingham Midshires, said: "Instant access accounts are an excellent way of saving for short-term needs however we would encourage savers to also remember the long-term and make adequate provisions."

Recent research from Chelsea Building Society found that people from Glasgow and Edinburgh are the best at saving money in the UK.

Insurances Limited “Savings become topical as interest rates rise, it is possible that this research will become dated very quickly. As quick as interest rates rise is as quick as consumers turn from being classed as spenders to savers.”

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