The credit crunch is encouraging Britons to save more money than ever, according to monthly research by the National Savings & Investments (NS&I).

New figures reveal that people saved on average more money in December, January and February than in any other quarter since it began the survey four and a half years ago.

The NS&I reasearch showed that the amount of cash put aside each month rose to £90.12 in February against an average of £86.35 over 2008.

The number of people who save money regularly each month remained constant throughout last year at 47 per cent of the population.

Dan Harkins, senior savings strategist at NS&I said: "It is clear that people are aware of the need to save more in these uncertain times and it is encouraging that, despite additional pressures on incomes, the average value of people's total savings was £17,443.”

The Office for National Statistics revealed today that while the UK economy had shrunk at a worse-than-expected 1.6 per cent in the final three months of 2008, there was a rise in the amount people are saving.

The savings ratio, which is measured as a percentage of an individual's disposable income, increased from 1.7 per cent of income to a historically normal level of 4.8 per cent as households reined in their consumption to pay off their debts.

There has also been an increase in saving in the US. The savings rate hit 4.2 per cent savings rate in February following a 4.4 per cent rate in January. It is the first time since August and September 1998 that the savings rate has exceeded 4 per cent for two consecutive months.

High personal debt levels are considered to be one of the main reasons why the British economy has been battered.

Jonathan Loynes, chief European economist at Capital Economics, said the increase in the savings ratio is evidence that the “required adjustment in households’ balance is at least underway" but added there was still a long way to go.

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