New research has shown British people are dealing with the economic squeeze by taking money out of Isas.
Abbey has said over a quarter (26 per cent) of the average Isa balance for the 2006-07 tax year has been withdrawn from accounts – funds totalling £6 billion.
Abbey found nearly a third (31 per cent) of those withdrawing money did so to pay for day-to-day costs, 15 per cent said the money was needed for bills and mortgage repayments and 13 per cent gave the money to help family and friends.
The figures suggest savings are currently keeping some consumers afloat and funds running out may ultimately result in financial problems or debt management issues.
Reza Attar-Zadeh, director of savings and investments at the company said dipping occasionally into savings was “no bad thing” but is not sensible for the long term.
The average amount taken out of Isas was £579.
Recently the Building Societies Association said Isas offer a flexible way to save money.
By Morwenna Kearns