Savings ratio

Savings ratio

The UK savings ratio, which is defined as the proportion of disposable income that is not spent on consumption*,  fell to 3.2% in the first quarter of 2017 – its lowest level since 1963, when records began.

This is down from 7% in 2016, and 10% in 2015. With inflation eroding the value of wage increases, savings levels are likely to continue to remain historically low, with increases in debt levels helping to boost household spending, post-Brexit. Indeed, during 2018 the ratio remained stubbornly low at just under 4%.

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*However, the definition is more complex than its appears because of the way contributions to pension funds and the interest and dividends earned are attributed to households.