The average savings pot will increase by £11,700 to £58,700 in real terms by 2025 driven by rising savings interest rates. The CEBR predicts average savings rates to rise to 2.3% by 2025 from the current 1.3%.

This larger household savings pot, alongside higher interest rates, mean households would earn £1,300 in annual interest in 2025, double the current £600.

However, the CEBR warned people could end up putting less money aside once the base rate rises as borrowers see their discretionary income fall. According to the report, this means it could actually take ten years of income growth for savings contributions to reach again in real terms what they are today.

Some 30% of people surveyed said a base rate rise means they would end up saving less

When asked why, 18% said it was out of fear that their monthly mortgage repayments would go up.

This concern is directly echoed by Bank of England governor Mark Carney, who recently stated that one in 25 households with a mortgage is vulnerable to a rate hike, because the cost of paying off debts amounts to more than 40% of a household income.

The CEBR forecasts the first Bank of England base rate rise at the start of 2017, rising to a steady state of 2% by the end of 2018, where it will remain static until 2025.

Steve Gowler, CEO of RCI Bank, said: “It’s clear that the impact of any base rate rise will impact people in different ways. Those with loans or mortgages will see a few tough years as their disposable income falls as a result of stunted income growth. To protect themselves from any negative impacts of a base rate rise, we urge borrowers to start saving now and create a safeguard from repayments increases. As Mark Carney advises, people should start preparing for a potential base rate rise.”

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