News
A third of people dig into savings every month, finds survey
Low levels of disposable income has led to nearly one in three adults in the UK regularly dipping into their savings each month to help pay for monthly outgoings, according to the latest readings from the Scottish Friendly ‘Disposable Income Index’.
It found 9.12 million people regularly take out an average of £100 from their savings each month to help pay for everyday expenses.
The quarterly index, which looks at the saving and spending habits of people across the UK, shows that on average, people in the UK are left with just eight per cent of their monthly salary as disposable income. This is up by 5 per cent from six months ago, but the latest report suggests that for many, it is still not enough to leave them in the black.
On average, people in the UK have just £205 left over each month after bills and essentials have been paid for, with 38 per cent of people saying that they have less than £100 in disposable income left over each month.
Despite this, the number of people putting aside money each month remains level at around 60 per cent, although the amount being put aside by these savers has fallen by 11 per cent, from £287 a month on average to £255.
Neil Lovatt, product director at Scottish Friendly, comments: “The latest index indicates that while the willingness to save is still present among the majority of people in the UK, the capacity to save is on the decline. As the monthly levels of disposable income have remained relatively stable, this suggests that some people in the UK are getting squeezed elsewhere.
“Housing remains the biggest expense for most, so, when rent or mortgage payments go up, disposable incomes naturally reduce. For example, demand for rental properties across the UK increased by around seven per cent since June, while supply fell. This has helped squeeze personal budgets leaving many to dig into their savings to make ends meet.”
Lovett believes things may get worse as winter approaches and people need to find additional funds to cover rising fuel costs and Christmas spending.
Regionally, the South West and Wales benefit from the highest levels of disposable income, having 9.2 per cent of their net income left over each month, while Northern Ireland has the lowest levels of disposable income at just 6.5 per cent.
Despite being the highest average earners in the country, those living in London have among the lowest disposable income, with just 6.9 per cent of their monthly salary left over each month.
