Figures have suggested that many people are failing to save as much as a result rises to the cost of household bills.
According to the British Bankers’ Association (BBA), The high street banks saw a rise in personal deposits and savings of £6.1bn in the first six months of the year.
However, the year on year rise over the same period in 2010 was more than double at £15.9bn, suggesting that an increase in the cost of bills may be to blame, the group said.
Mortgage and credit card activity also remained subdued, it added, after house prices continued to fall in recent times.
Different areas of household bills have been on the rise throughout the year, including fuel costs to drivers, as well as the cost of heating homes.
This has meant that consumers’ disposable income has been reduced, leaving less cash available to set aside for savings accounts, the BBA said.
David Dooks, the BBA’s statistics director, said:”Personal deposits are growing only slowly as some people may be using savings to pay higher household bills,” .
This trend is unlikely to improve any time soon, as three of the big six energy suppliers have recently announced plans to roll out price rises which are due to come into effect in the coming weeks.
Low interest rates are also having an affect personal savings accounts, as the Bank of England base rate has failed to rise above its record low of just half a percentage point for the last two and a half years.
The number of approved mortgages offered on homes by High Street banks in June reached 31,747, sightly up on May’s figures but 6% down from June 2010.
“Banks continue to lend for house purchase but the weak mortgage market is self-evident, although some growth is coming from the buy-to-let sector to meet demand for rental properties,” Mr Dooks said.
The figures also showed a slight improvement in remortgaging levels in June compared with May.