The average Briton is left with only £148 spending money each month after essential bills and expenses, according to a new ‘disposable income index’ launched this week.
The findings, sponsored by savings bank Scottish Friendly are published on the same day as housing charity Shelter publish a survey which shows the majority of adults in the south lack sufficient savings to meet their housing costs should they become unemployed.
The new index reveals that despite taking home an average monthly salary of £2,171 after tax, less than a tenth remains after living expenses like mortgage payments or rent and utilities are taken into account.
Nevertheless say Scottish Friendly, paying down debt and building a savings pot remains a priority for many, with over half of people (54 per cent) still managing to save or invest each month. On average, people put aside £72 each month, although nearly half (47 per cent) of those who save, manage to put aside £100 or more.
Part of this may be in anticipation of the worst, with around a quarter of people (25 per cent) believing that their financial situation is likely to worsening over the next three months. Indeed, of those people who are saving, over half (56 per cent) do not have a specific reason for doing so.
Neil Lovatt, product director at Scottish Friendly, said:
“There has been a transformation in the British mindset when it comes to managing finances. In the recent past, household budgets were very much driven by borrowing. However, the emphasis now seems to have gone full circle and we have returned to a post war emphasis on saving and paying down debt, despite many having to deal with a very tight budget.”
“The index has revealed that one in three people think that saving into an ISA or savings account each month is an essential part of the monthly budget, while over half of the UK believes that it is vital to pay into a pension.
“This is particularly true for the younger generation where over a third of 18-24 year olds believe that saving for retirement is a necessity. “