- 1 in 4 UK adults have less than £500 in savings
- Only 1 in 3 believe they will feel the benefit of interest rates falling
- The majority feel the UK economy is ‘working against them’
One in four adults currently have less than £500 in savings as households continue to feel financial pressure.
Two in five have less than £2,000 in savings, data from market research firm Savanta claims.
It comes as the Monetary Policy Committee Meeting is due to give its decision on the Bank of England Base rate later today.
The Bank of England is expected to hold the base rate at 5.25 per cent for the fourth time in a row, but economists predict that interest rates could start to fall this year due to inflation easing
Feeling the strain: One in four UK adults currently has less than £500 in savings
Despite the rate of inflation coming down, many households are still feeling the pressure of high costs of borrowing and inflation which has been slow to ease.
Families have been hit particularly hard, with little spare money at the end of the month.
In fact, the percentage of Britons with absolutely no spare cash at the end of each month nearly doubled between 2022 and 2023 – rising from 11 per cent in 2022 to 21 per cent in 2023, data from Nationwide Building Society suggests.
Now, only one in three people believe a fall in interest rates will benefit them financially, with 36 per cent believing a rate change will have no impact on them.
The data shows that the public mood is generally one of pessimism, with with seven in ten people believing there won’t be an improvement in the economy in 2024.
The majority of the public believe the economy is geared against them, with 54 per cent indicating that they believe the UK economy is working against them right now.
Of those who have less than £2,000 in savings, which includes cash savings and investments, more people see themselves as savers than spenders, showing the struggle to save with costs so high.
That comes as savings rates soared to a highs not seen in 15 years in 2023.
On the other side of the coin, rising interest rates mean the cost of borrowing has soared.
Mortgage costs increased significantly in 2023, before starting to slowly ease in the final quarter.
Nationwide said average monthly mortgage repayments stood at £722 in 2021, £774 in 2022 and £880 last year, marking a 22 per cent increase over the period.
Chris Hopkins, political research director at Savanta says: ‘The rising cost of living has meant that a significant proportion of the UK public are struggling, despite government optimism for an economic recovery ahead of a general election.
‘Make no mistake, our research shows increasing numbers of people in real difficulty – and who currently don’t see an end in sight.
‘In the short-term, these findings show more time is needed before the public feels the benefits of stabilising inflation.
‘Longer-term, there are serious questions about how sustainable it is that the majority of the public believe the economy is geared against them.’
