Family savings expected to fall 71 per cent from last year – averaging £26 a week

Household savings are expected to decline 71 percent year-on-year, to an average of 2626 per week. The news comes after inflationary pressures have drastically reduced households’ ability to spend money, data indicates.

The Scottish Center for Economic, Business and Friendly Research (Cebr) estimates that households should earn an extra €80 per week in taxes, or spend 66 yen less to save at the same level as the second quarter of last year. .

Kevin Brown, a Scottish community savings specialist, said: “Family savings are likely to fall to pre-pandemic levels in the second quarter of this year as UK wages fall and travel increases.

A 1.25 percentage point increase in National Social Security contributions and a freeze on income tax lines cannot come at the worst of times for families. This will lower people’s wages, while the new cap on energy prices will greatly increase the energy of many families. Invoices.

As a result, the ability of households to save and invest in the short run will be greatly reduced. Not only will people be able to spend less money, but they will also be able to rely on existing savings to maintain it. their normal standard of living.

“Ultimately, inflation will decline and wages will rise, allowing more families to reuse their savings, but for now this is a case of cost-cutting where it should not be avoided.”

According to the survey, household spending this month will be 12% higher than the same month last year, led by Ofgem for its 54% cap rate and new fiscal policies.

As a result, average weekly savings are expected to decline from 41 41 in March to 27 27 in April and to 26 yen in May and June.

Family savings increased during the pandemic and peaked in the first three months of 2021, when the average family saves 2,152 per week. Savings levels have fallen every quarter since then, but are expected to rise in the third quarter of this year as inflationary pressures abate and wage growth improves.

A survey of more than 2,000 British adults surveyed showed that 72% expect higher prices to deteriorate their standard of living next year. Of those, 24 percent expect their standard of living to “significantly” decrease.

The most common impact of the cost of living crisis is expected to be on consumers’ shopping habits, with 50% of respondents planning to change the type of goods and services. Meanwhile, 34% said they would need to adjust their purchases, with one in five looking for new sources of income, while 19% would use existing savings.

“We stand ready to support savers at all income levels and at all stages of life,” said Her Majesty’s Treasury representative. “In order for people to save more than they earn, we lowered the universal credit rate for low-income families, giving an average of 1.7 million families an additional 1,000,000 per year.

“We have increased the amount people can save without paying up to 20,000 for Isa and have increased the personal savings allowance for ordinary taxpayers to 1,000,000 and 500,500 for taxpayers with higher rates – allowing 95 percent of people with savings income. Do not pay taxes on this income.

“We are also promoting lower wages by raising the national subsistence level, which means an increase of 1,000,100 per year for the full-time worker, and by increasing National Insurance margins, which will save the average employee more than 30,330 per year.”

3Gem surveyed 2,000 adults in the UK between February 14-20.