Rate rise should mean more interest in saving...but UK needs to get a grip on budgeting

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A massive 72% of UK consumers believe they aren’t saving enough, but out of the people who are in a position to increase the amount they currently save, almost 8 million (18%) claim they enjoy spending their money too much to do so. This distinct problem with our ability to budget is the latest finding from research commissioned by IFA Promotion, the organisation promoting the benefits of independent financial advice.

Following the recent decision by the Monetary Policy Committee to increase interest rates by a quarter per cent, IFA Promotion is urging consumers to take heed of the potential benefits of an interest rate rise and to start saving their money – now!  The here and now is proving a perfect opportunity for people to address this situation, redressing the balance between their spending and saving, and adopting a more pragmatic approach to their budgeting behaviour.

David Elms, Chief Executive of IFA Promotion comments: “Last week’s announcement should be treated less as blanket bad news for the heavily indebted UK consumer and more as a wake up call to save more and spend less. The interest rate rise is minimal, but has met a shock reaction, which I hope will trigger people to finally take their heads out of the sand and act logically when it comes to their future financial security. At the very least, it should deter people from unnecessary spending and the temptation of taking on new debt, but what we really need is a long-term commitment to saving. With the prospect of increased rates of returns, now is an ideal time to start.”

The first step is to tackle bad budgeting habits, which are currently to blame for the UK’s snub of savings. A staggering 4.8 million people have no gauge on their current financial position, and nearly a third of the adult population (32%) has felt out of control of their finances at some point in their lives.

Elms concluded: “Being on top of our finances has never been more vital, and a careless attitude toward financial planning and organisation is simply not feasible in an age when the onus for retirement provision rests with the individual. Consumers need discipline and foresight in order to make their money work hard for them. If you need help with budgeting or guidance as to the best savings vehicles for your needs, a visit to your local independent financial is a step in the right direction.”

IFA Promotion offers consumers a range of information and interactive tools at www.unbiased.co.uk/getsaving, to help them take financial control.  Visitors can also obtain details of local IFAs who focus on investment and saving.

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* The Get Saving! 2006 report was produced for IFA Promotion by RAKM, and is partly based on an analysis of Inland Revenue, ONS, DWP Family Resource survey, Bank of England and ABI data along with a specially-commissioned face-to-face consumer survey of 2,000 UK adults (16+), conducted by BMRB during October 2005.  With detailed queries on the report, call Paul Hersey at RAKM on 01737 216 940.  To view and download previous Get Saving! reports visit www.unbiased.co.uk/getsaving 

For further information please contact:

For expert comment or case studies from over 200 media-friendly IFAs, journalists should call IFA Promotion’s Media Services hotline on

020 7294 3682 or search online in ‘Media’ at www.unbiased.co.uk

1.      Independent Financial Adviser Promotion

IFA Promotion was established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents around 9,000 firms of independent financial advisers across the UK and is sponsored by 31 leading financial institutions. In the past 12 months, over 530,000 consumers and businesses used IFA Promotion to find local independent financial advice.

IFA Promotion believes Independent financial advice should be:

• Affordable. The option to take independent financial advice should be available, by right, to all- not just the wealthiest in society
• Convenient. IFAs should be available in the location of the consumer’s choice, wherever they live i
• Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who i

2.      Independent Financial Adviser Promotion’s sponsors

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