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Car a top priority for young savers

Buying a new car, holidays and home improvements are the most likely reasons for saving money, according to new research.

A study by the financial services arm of motoring organisation the AA found that over 90% of savers aged between 18 and 24 say a car is their top priority.

"For most teenagers, turning 17 means the time for L-plates, driving lessons and the bid for freedom," says Lloyd East, director of AA Financial Services.

"It also means saving hard for their first big purchase and because they're at the bottom of the earnings ladder, every penny counts.

"Yet our research also shows that the majority of savers will find the poor rate of interest they earn on their account will tarnish the excitement of buying their first motor. Around 85% of savers go to their current provider rather than shopping around for the best interest rate. Some accounts pay less than 1 per cent yet just to stand still against the Retail Prices Index they should be getting at least 2.88 per cent."

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