Household Savings on an Upswing: A Fourth‑Quarter Snap
The Office for National Statistics (ONS) just dropped the freshest numbers, and it looks like UK families are finally feeling a bit more secure. The household‑saving ratio jumped to 12.0 % in Q4 2024, up from 10.3 % in the previous quarter (Jul‑Sep 2024).
What’s Building the Nest Egg?
- Non‑pension savings made a +7.3‑point contribution.
- Pension accounts added +4.7 points.
Compare that with Q3: non‑pension savings contributed +5.8 points, while pension savings were +4.5 points. The uptick in non‑pension savings is especially noteworthy – it’s the highest level on record when you ignore the pandemic‑era anomaly.
Dream‑Sequence: The Highest Since 2010
When you strip out the COVID‑19 period, household savings hit a record high that won’t be eclipsed until after the 2010‑Q1 era — the last time it was this robust.
Expert Take‑aways (in plain talk)
- Colin Low, managing director at Kingsfleet remarks, “The cost‑of‑living crisis? Looks like it’s officially over – for now. Inflation pushed houses to dip into their savings, but now benefits and wages have outpaced price hikes, and people are piling up those extra dollars for future storms.”
- Wes Wilkes, CEO of IronMarket Wealth warns, “With savings at the top spot since the last financial crisis, people are bracing hard. That means a slow‑down in spending, stalling growth for the government and maybe nudging the MPC toward rate cuts.”
- Harry Mills, director at Oku Markets calls it a paradox: “Spending is on the back burner because everyone’s savings are swooping up. That flips a slow economy into a sluggish one. Fancy housing costs in London are a big part – renters stash most of their cash for deposits. The housing‑affordability ratio is above 12 in 80% of local authorities, compared to just 7.7 in England and Wales.”
- Tony Redondo, founder of Cosmos Currency Exchange notes, “The jump in non‑pension savings shows folks prioritise liquidity over locked‑away pensions. Chronic uncertainty, higher interest rates and global jitters are keeping people in cash mode.”
- Riz Malik, independent adviser at R3 Wealth paints a blurry picture: “People are walking, but the mood is still scared. Until hope clicks back on, they’ll hoard like squirrels. The economy needs people to spend to move off that dead‑center rug.”
- Rob Mansfield, independent adviser at Rootes Wealth Management offers a silver lining: “Building a nest egg is great — it’s a safety net for the next car repair or boiler chucking out. In the long run, that stash means fewer struggles and a smoother retirement.”
Bottom line
Happy news for savers, but a potential long‑haul for spending and growth. Economy‑watchers should keep an eye on whether this newfound cash pressure will flip back into a spending sprint or keep us in a quiet, cautious economy.
