Switching from spending to saving 'will take time'

An expert has spoken about switching to saving from spending.

Switching from a trend of borrowing on items such as credit cards to facilitating savings accounts like ISAs or fixed rate bonds will not be an overnight process for people in the UK.

That is according to Mark Bower, managing director at online resource Money Maxim, who has said that it will take a significant amount of time for households up and down the country to rebalance their finances, which represents a reflection of the wider economy following the worldwide monetary slump.

Mr Bower explained that it is important for consumers to treat the time period as a transitional phase in how they spend their money, meaning that they should look to decrease their credit card bills on a monthly basis while also looking into the possibility of restructuring their debt into a "cheaper repayment programme".

"As this starts to happen any surplus released can then be used to build a savings pot," he added.

The expert's comments come after the publication of Scottish Widows' Priorities of Life report yesterday (February 7th 2011), which revealed that 38 per cent of people feel they are not in a position to save enough in 2011, which represents a slight drop on the figure posted this time last year.

In addition, 35 per cent of Britons indicated they have fears about the possibility that they are neglecting their overall financial security this year, which is a slightly lower proportion of the population than in 2010.

Mr Bower stresses that rebalancing personal outgoings should not be seen as a short-term project by consumers, but added that, over a longer period of time, the process can help to rebuild household budgets and savings pots for the future.