Savings gap widens over last year between households

THE savings gap between families on low and high incomes has widened over the past year, with lowerearning households typically relying on less than £100 in their rainy day fund, a report has found.

Low-income families earning £1,500 or less per month now typically have just £95 sitting in savings and investments, excluding money being saved into pensions, Aviva has found. A year ago, families in this income bracket had £136 on average.

Meanwhile, high-income families have been shoring up more cash, with a typical savings pot of £62,885 for households with an income of £5,001 a month or more.

A year ago, families in this higher income bracket had £50,208 put away typically. The typical amount held in savings and investments across all UK families has fallen from £4,426 last summer to £3,134, the lowest level since summer 2015 – although the figure for Wales bucked the UK trend.

Only three regions have savings and investments, excluding pensions, worth more than £3,000 on average – London (£13,333), Wales (£4,167) and the South East of Eng- land (£3,196).

London’s figure may reflect higher earnings and higher living costs there generally, meaning people are putting bigger amounts aside.

Families in the West Midlands were found to have the lowest typical savings, at £1,700 – the only UK region to have savings and investments worth less than £2,000.

More than two-fifths (43%) of families said significant increases in the price of basic necessities is one of the biggest threats to their standard of living in the next three months, up from 36% last summer.