Brits ditch the risky options and get busy saving

When times were good, Britons were all too willing to be a little adventurous, with trips to Africa replacing the usual family holiday to Wales or the trusty saloon making way for a sporty little number.

And such was the case with personal finances.

With levels of disposable income riding high and virtually all UK households able to get hold of credit, simple savings accounts were abandoned in favour of more glamorous investment options, such as stocks and shares and even fine wines or art.

However, now that consumers have been brought back down to earth with a jolt, banks and building societies are reporting a return to the old ways, with frugality the order of the day and many Britons acting so as to minimise the risk to their hard-earned money.

According to the latest 'Savings Outlook Report' from Alliance & Leicester, around one in four Brits are now more likely to put money aside for the future than they were just two years ago.

What's more, with 54 per cent of those polled acknowledging that longer life expectancy levels means that they will need more money with which to retire, 18 per cent said that they have moved money out of the stock market and put it into cash savings accounts due to concerns over the current market conditions.

Perhaps unsurprisingly, those nearest to retirement are the most likely to have reassessed their finances in the past couple of months, and Hetal Parmar, manager for savings at Alliance & Leicester has advised that, given the state of the economy, there has never been a better time to look to the future.

"I think it is very important and it's not just me; from the research we have done one in two people over 50 have told us that they actually regret not giving enough thought to their finances in the years gone by," he said.

"That is a very important lesson for all of us and my advice would be to have a little craving for saving and build up a savings pot for the long term."

Significantly, this advice comes soon after Life Trust Insurance reported that the cost of retirement for a typical UK household now stands at £413,00, while those likely to be living alone after the age of 65 can now expect to need £326,000.

And though developments in the past few days suggest that the worst may be over, the fallout of the credit crunch has served to prove just how volatile the economy can be, making getting on top of credit cards or ensuring savings accounts are in good shape more important than ever.