One in Three People Dip Into Savings Every Month To Make Ends Meet

25 Sep, 2014

Dwindling levels of disposable income has led to almost a third of people in the UK having to raid their savings each month to help pay for household essential, according to the Scottish Friendly ‘Disposable Income Index’.

It claims that more than nine million people regularly dip into their savings each month to the tune of around £100 just to help cover everyday expenses.

This index is updated every three months and looks at the saving and spending habits of UK consumers.

It reveals that on average, people are left with just eight per cent of their monthly salary or wages as disposable income. This is a slight improvement on six months ago, but for many, it is still a struggle to make ends meet without raiding their savings accounts.

On average, the report suggests people have just £205 left over each month after bills and essentials have been paid for, with one in four saying that they have less than £100 in disposable income left over each month.

A spokesman for Scottish Friendly, said: “The latest index indicates that while the willingness to save is still present among the majority of people in the UK, the capacity to save is on the decline. As the monthly levels of disposable income have remained relatively stable, this suggests that some people in the UK are getting squeezed elsewhere.

“Housing remains the biggest expense for most, so, when rent or mortgage payments go up, disposable incomes naturally reduce. For example, demand for rental properties across the UK increased by around seven per cent since June, while supply fell. This has helped squeeze personal budgets leaving many to dig into their savings to make ends meet.”

Industry experts believe things may deteriorate during the winter months as people need to find extra cash to pay for higher fuel costs and Christmas spending.