Slump in rate of household saving

27 June 2008

The rate at which people are saving money has slipped to its lowest level for over 40 years, official figures have revealed.

According to the Office for National Statistics (ONS), the savings ratio, which gauges how much of household income is being set aside rather than spent, dropped to just 1.1 per cent in the first three months of this year.

The figure represents the ratio’s lowest point since 1959.

Experts blamed rises in the cost of living, higher mortgage costs, low wage settlements and the credit crunch for the downturn in savings.

Another indication of the pressures that families find themselves under came with news that disposable household income fell by 1 per cent in the first quarter of 2008.