THE amount of money Britons have saved looks set to hit £1 trillion by 2012, research by Alliance & Leicester (A&L) has claimed.

The level of cash set aside has nearly doubled since the millennium to stand at around £876 billion.

A&L said savings levels increased at five times the rate of unsecured borrowing, rising by £426 billion since 2000, compared with a £79 billion increase in debt on credit cards, loans and overdrafts during the same period.

It added that Britons now have £876 billion saved in cash, while they owe just £214.8 billion in unsecured debt.

A&L said the growth in savings levels looks set to continue, with 39 per cent of people planning to increase the amount of money they have set aside during the coming five years.

Head of savings at Alliance & Leicester Ewan Edwards said: "If current growth continues, then in the next five years personal cash savings could grow to around £1 trillion."

The research found that just 2 per cent of people think saving is unnecessary, while 39 per cent think it is important for their financial future.

But one in four people have no money set aside at all.

Three-quarters of them said they do not have enough spare income to save, while 12 per cent claimed they are not disciplined enough to do so.

The report found that there are likely to be changes in the way people save, driven by factors such as a growth in the use of the internet and price comparison websites.

It found that instant access accounts have grown in popularity during the past five years, with more than half of the nation's cash now held in this type of account.

But at the same time it said balances in notice accounts have fallen, with these now accoun-ting for just 8 per cent of the savings market, compared with 23 per cent five years ago.

It predicted that notice accounts would "die out" during the coming five years, with virtually no new accounts being opened and the balances held in existing ones falling dramatically.

A&L also said there had been a growth in so-called disciplined savings accounts, which discourage people from dipping into their savings.

The number of regular savings accounts, which encourage people to put aside a set amount each month, has grown considerably, although they still make up only 2 per cent of the market in terms of balances.

The amount of money held in tax-free cash ISAs has more than doubled in the past five years, with cash held in them now accounting for 21 per cent of all savings.

A&L expects their popularity to continue to grow, with them accounting for 35 per cent of all savings by 2012.

Around 40 per cent of cash savings are now managed online, four times more than five years ago, and internet comparison sites are likely to have a growing influence, making it easier for people to shop around for the best rates.

Mr Edwards added: "We expect many of the trends over the last few years to continue, with overall savings balances rising and further growth in tax-efficient savings such as ISAs, instant access accounts and different types of disciplined' savings."