The Office for National Statistics (ONS) has stated that household saving ratio has fallen to a record low. The UK economic growth was supposedly strong late in 2016 however, now economists have been warning about worrying signs as the savings ratio fell to a record low.
The ONS have said that in the last three months of last year the UK economy grew by 0.7%. Economists believe that this growth was due to consumer spending, partly assisted by households going deeper into savings and therefore getting in more debt. The ratio allegedly fell to its lowest since the 1960s.
The ONS also stated that the ratio also fell due to changes in insurance and pension values in the last quarter of last year.
However, it was also part of a bigger trend, which had seen the ratio fall since mid-2015 as more consumer spending surpassed growth in disposable incomes.
The Bank of England has estimate that weaker incomes will most likely result in a significant fall on the savings ratio within the next three years!
The savings ratio is currently at 3.3% which is its lowest level since 1963 when the records began.