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UK family finances see rise in savings and income but also higher debt

POSTED: 1st August 2013
IN: Personal News
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The latest Aviva Family Finances report, out in July 2013, sets out the ways that UK households have developed strategies for coping financially during a period when inflation has outpaced earnings growth for more than three years.

The latest Aviva Family Finances report, out in July 2013, sets out the ways that UK households have developed strategies for coping financially during a period when inflation has outpaced earnings growth for more than three years.undefined

The report shows that although family income and savings levels have risen, household debt has risen to an all-time high.

The latest profile of UK household finances shows that most families are coping quite well with the welfare changes that have been introduced by the coalition government over the past three years.

Overall family net incomes have gone up by five per cent since August 2012 to £2,108.

However, some types of families have fared better than others. Couples without plans to have children have seen a rise of £209, whilst couples with plans to have children have seen a rise of just £27.

Families in London have the highest net monthly income at an average of £2,900 per household, followed by the south east at £2,273. By contrast, net household income in Wales is just £1,700 per month.

The research showed that households have increased their savings levels to try and repair their personal balance sheets and provide a buffer as the UK struggles to emerge from the recession. Savings levels have risen to £96 a month, up 20 per cent from January 2013, when savings levels were £80 a month.

For the first time since November 2011, the amount a typical family spends has dropped, down to £1,748 from the peak of £1,819 seen in January 2013.

This has been easier to achieve for couples without children, who have managed to save 16 per cent a month, compared to a two per cent drop for couples with one child or a one per cent drop for couples with two or more children.

Property wealth has increased moderately since August 2012, with the typical property valued at £218,760, up from £210,620. The average house price in London is £342,126, while in the North East, average prices have fallen to £152,667, the lowest level in the UK.

Debt levels have also risen, along with incomes and savings. The report reveals unsecured borrowing has gone up from £10,563 to £12,834 over the same period.

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