Billions taken out of building societies

Savers withdrew more money from building societies in June than at any other time since records began, leaving mutuals with a £2.2 billion outflow over the month, according to figures published today by the Building Societies Association (BSA).

The previous high of £811 million withdrawn in April has been dwarfed by June's data, which show the most savings taken out of building societies in over 50 years.

The BSA blamed the figures on Britons paying off mortgages. Brian Morris, head of savings at the trade body, said: "With rising unemployment, subdued income growth and the official bank rate at an historic low, it is very difficult to attract retail savings.

"Households are looking to take advantage of the low interest rates to pay off debt rather than save. These conditions are expected to persist into 2010."

The BSA also published figures on mortgage lending today, which hit £1.98 billion in June, up almost a third on May, but still 40% lower than the £3.25 billion recorded at the same time last year.