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Man walking down street on a summers day past a closed down business with a to let sign.

Income, savings and debt

How factoring savings and debts into our picture of household finances can improve our understanding of how to achieve a more socially just future.

Our mission

JRF’s mission is to support a transition to a more socially just future. We believe two crucial steps towards achieving that are:

  • putting an end to destitution
  • ensuring everyone can enjoy the baseline of security needed to live a good life.

Income, savings and debt are crucial factors to both of those aims.

Finances beyond income

Living standards and inequality are often discussed in terms of the flow of weekly or annual income. But just as companies are assessed through balance sheets detailing what they own and what they owe, a rounded picture of household finances must include their income, savings and debt.

No savings leaves households vulnerable to destitution

Families with no savings can be one broken boiler or car breakdown away from crisis and poverty. This is not a fringe group. Recent estimates suggest that around a quarter of the adult population has less than £100 put away in savings. And when people enter poverty, they are likely to fall into debt or arrears on basic household bills or rent. In this way escaping one emergency can bring about the next, as the weight of debt raises the risk of destitution and homelessness.

Families in this position are exposed. Millions of Britons look ahead to retirement with fear, knowing they don’t have enough put aside to live as they would wish to. With dwindling rates of home ownership among the working-age population, fewer people are acquiring a property to fall back on. And too few have sufficient rainy-day funds to get through anything other than a short break in earnings.

Discover more about income, savings and debt

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