Savers splash out for Christmas

Recent research suggests each adult in the UK will spend around £300 on presents this year, as the hard times of the previous 12 months are pushed firmly to the back of people’s minds. While those receiving the gifts are likely to be mightily grateful, the considerable sized hole that will be left in the gift-givers savings is a worry.Indeed, a third of savers admit they are likely to spend almost 10% of their savings to help cover the cost of their festive generosity.It is unclear whether savings pots will be replenished once the festive season has passed, but there is a chance that post-Christmas economic blues could start to hold back the recovery.The holidays on stamp duty and VAT are set to come to an end at the turn of the year, while footfall on the high street will undoubtedly drop as the pre and post-Christmas sales draw to a close. To help counteract these negative influences, it is likely the Bank of England’s base rate will remain at its record low for a few more months yet.Having been pegged at 0.5% since March, savers have been getting a raw deal. Indeed, it has generally been acknowledged that not even the best savings rates available have been much to shout about this year. Yet a corner does appear to have been turned. Rates on a number of long term bonds have now passed the four per cent mark, despite having been as low as two per cent in March. Even over the shorter term, one year bonds are paying on average more than 3%. In this respect, savers certainly seem to have a few more options now than they did ten months ago. However, while it is likely the choices for those looking for the best savings rateswill continue to widen in the new year, by how much and how quickly remains to be seen.