Many households earn too little to pay for basic necessities, and to save for an uncertain future. Over a third of households now owe more in debt that they have saved, and millions more face falling into trouble in the event of a financial shock they cannot avoid. In our new briefing note, Walking the Tightrope – Savings and Debt Inequality in Great Britain, we find that:
- 6.5 million households are in debt, or face the prospect of falling into debt within a month, should they lose their jobs. Over 40 per cent of non-retired households have too little saved to pay even a month’s worth of household bills.
- 5.5 million households owe more in debt than they have saved.
- Many families are also vulnerable to one-off financial shocks. Over a quarter (28%) of non-retired households has too little saved to pay the £540 needed for a boiler to be replaced.
- While the richest 10 per cent have on average £49,500 saved, the poorest 10 per cent of households have just £100 saved on average.
- The Government could significantly boost the savings of those on low incomes by channeling funding from its lifetime ISA scheme to its Help to Save scheme.