Building society savings up, mortgages down

Economic uncertainty has led to Britons choosing to put more money in savings accounts with building societies rather than investing in other ways which are perceived to be more risky.

The Building Societies Association (BSA) revealed that £853 million had been deposited with building societies in May 2008, compared with £608 for the same period last year.

Adrian Coles, director general of the BSA, said: "Yet again, savers have responded to the uncertain economic outlook by choosing the safety of a building society over the volatility of the stock market. High interest rates offered by societies, coupled with attractive product ranges, have seen customers continuing to flock to societies with their savings."

At the same time, net lending by building societies in May was down to £125 million from £666 million in April.

"The figures... reflect the considerable adjustment in housing market activity now being experienced. We expect activity to remain at low levels for some time," said Mr Coles.