Raids on nest eggs 'are increasing'

More than a third of Britons have dipped into their savings during the past six months as people struggle to meet the rising cost of living, a survey indicated yesterday.

About 36 per cent of people said their savings had decreased during the six months to the end of September, with the average person withdrawing 16.5 per cent of their nest egg.

The latest decrease in savings levels follows a 10 per cent fall during the previous six months, according to Investec Bank.

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The main reason people gave for raiding their savings was needing to cover the cost of living, cited by 40 per cent of those who withdrew money, followed by the need to pay for a significant purchase, such as a car, at 28 per cent or a holiday, at 27 per cent.

But a fifth of people said they had used the money to pay off or reduce debts, while eight per cent had lent money to family or friends. The same proportion had given cash to family or friends.

Other reasons for withdrawing cash included investing it or paying it into a pension, and giving it to charity.