One in four Britons would rather save than pay off debts, study says
A study from financial services firm Axa has found that more than one in four adults in the UK are still regularly saving instead of redirecting their funds to pay off unsecured debts.
Axa, which conducted the survey as part of a year-long social experiment called Axa Avenue, said that the seemingly contradictory behavior reflected a Jekyll and Hyde attitude to personal finance. With an abundance of cheap credit and enticing saving accounts on offer, more than 12.2 million people are funding their buy-now-pay-later habits with credit, while feeling compelled to save some funds for a rainy day. However, by plowing around GBP2 billion into saving accounts and ignoring debt, millions of people are wasting their money as the interest earned on savings cannot match the interest accrued on debts. Of those who save money while paying off debts, 37% said it was because they felt more secure with savings, 25% did so through habit and 25% said that they had been brought up to save money. Axa Avenue's resident independent financial adviser Saran Allott-Davey said: Saving to have an emergency fund should be a priority for us all, but not if we are failing to reduce outstanding debts as a result. The desire to save for a rainy day to ensure they have an emergency fund is costing millions of people who would be better off redirecting their funds for the short-term to clear their debts.
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