Savings levels of UK households hit record low Go compare with our comparison table

Savings levels of UK households hit record low

11 April 2010 / by Andy Davies

The amount of money being saved by UK households has fallen to its lowest level in 38 years, according to the latest data from the Office for National Statistics (ONS).

In its Social Trends survey, the ONS has revealed that the household savings ratio in the UK in 2008 was 1.7 per cent of total resources, which is significantly lower than the average rate of 7.6 per cent seen between 1970 and 2008.

This is compared to a peak of 12.3 per cent in 1980 before the savings ratio declined sharply during the mid to late eighties hitting a low of 3.9 per cent, before rising again in 1993 to almost 12 per cent. However, over the following fifteen years the savings ratio of households in the UK declined steadily before hitting its historic low of 1.7 per cent.

However, in light of the banking crisis in 2008 and following the recession, the ONS has said that data for the first two quarters of 2009 "indicate that households have reacted to the economic recession of 2008 and 2009 by increasing the proportion of income they saved" as the savings ratio has now reached 4.8 per cent.

Meanwhile, of people's perceptions and expectations towards their financial well-being and their savings attitudes, the ONS has found that of those who expect their financial situation to improve, 37 per cent said they intended to save in the next 12 months.

Encouragingly, less than one in 10 people said they were less likely to save in the future, believing that their financial situation would get worse.  

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