Savings gap increasing 25% year on year
- Low income families have a meager £95 in savings, compared to £62,885 for high income families, savings gap now growing 25% annually
- UK families’ savings fall to their lowest levels in 18 months as typical income declines
- Homeownership among families falls to lowest level in four years (64%), low income worst off; 41% are homeowners compared to 90% of high income families
- High income families’ perceived property value now more than 2.5 times higher than that of low income families
- Over two in five families fear rising prices as inflation climbs and debt grows
The difference in financial outlooks between low and high income workers has grown vastly over the past year as inequality worsens.
Families also face increased financial pressure from stalling incomes and savings, added to rising debt and inflation fears.
The savings gap between low and high income families grew by a massive 25% year on year, from £50,072 in winter of 2015/16 to £62,790 in winter 2016/17.
Aviva’s data shows low income families (those earning £1,500 or less a month) now have a paltry £95 in savings and investments, down from £136 a year ago.
High income families (those earning £5,001 a month or more) have increased typical savings to £62,885.
Aviva’s data suggests that one in four families are now classed as low income workers.
The typical amount held in savings and investments across all UK families is at it’s lowest level since 2015 (£3,116), dropping from £4,426 last summer to £3,134.
Paul Brencher, Managing Director, Individual Protection, Aviva UK said:
The gulf between low and high income families is showing signs of widening, in a worrying indication that those less fortunate are finding their finances increasingly stretched. While high income families have been able to increase their savings pots, those with low incomes have seen theirs fall to less than £100. This reflects the trend of shrinking savings seen across UK families as a whole. Without a financial back-up, any sudden unexpected expense could put low income families in particular under added pressure.