Worrying data published by the Office for National Statistics (ONS) towards the end of July has revealed that household savings hit a record low in the first quarter (Q1) of 2017 – after falling by as much as 48 per cent quarter-on-quarter.
According to reports, Britons saved an average of just 1.7 per cent of their total earnings in Q1 of 2017 – down dramatically from the 3.3 per cent recorded in the final quarter (Q4) of last year.
The ONS’ data also reveals that household savings have been following a downward trend since July 2015, thought to be linked to a toxic cocktail of “strong consumption volumes, increasing consumer prices and subdued wage growth,” its report reads.
The UK’s household consumption expenditure ratio rose by two per cent to hit 0.97 per cent in the first quarter of 2017.
Commentators have been keen to point out that this figure is just shy of the peak of 0.99 per cent recorded during the first quarter of 2008, around the time the financial crisis hit.
Some have gone as far as to say that alarm bells should be ringing in the wake of the ONS’ most recent data – despite the fact that its figures also reveal that the UK economy grew by 0.2 per cent in Q1 of 2017.
Separate research published in recent months has revealed that only three in ten of the UK’s working age population currently have savings of three months’ income or more – while it is estimated that around 12 million Britons are not putting away enough money to fund their retirement.
Source: Household Saving Ratio