Most would use spare cash to save or cut debts

SPENDING cash is not on the minds of consumers with half saying they would use extra money to pay off debts and a third saying they would save extra cash.

According to a survey, just 13% of people said they would spend any spare cash.

As more people think now is a good time to save the Nationwide UK (Ireland) savings index increased by three points in August, following on from a four-point increase in July.

The index said the continuing economic uncertainty is having a positive impact on consumer sentiment towards saving.

In August, the percentage of people who think now is a bad time to save fell 5% to 40%, while the number of people who think now is a good time to save increased from 25% in July to 26% in August.

The survey also said that just one in 10 people think that government policy encourages saving, while the number of people who believe that government policy discourages saving increased 6% to 55%.

Managing director of Nationwide UK, Brendan Synnott said: “The continued upward trend in the index suggests that people are becoming more uncertain about the economic environment and as a result are adopting the precautionary savings approach observed during 2009 and early 2010.

“There is now increasing evidence that some of the consumer optimism that was evident in the spring has given way to a more conservative approach,” he said.

The savings index is constructed from monthly research on the attitudes of consumers towards savings. It also found concerns about a low interest rate environment are being offset by a perceived need to save given the increased uncertainty in the economic environment.