Savings and debt

Households on low incomes are disproportionately likely to have little or no savings. According to the Financial Conduct Authority’s Financial Lives Survey (2025), 10% of UK adults had no savings in 2024, but this varied sharply by household income.

Among adults living in households with annual incomes below £15,000, more than 1 in 5 (22%) reported having no savings at all. This fell to 10% among those with incomes between £15,000 and £30,000, and to just 3% among those with incomes of £50,000 or more. More than a third of households earning under £15,000 had less than £1,000 in savings, compared with just 11% of households earning £50,000 or more.

Savings play a crucial role in protecting households from financial hardship. Even among those in the lowest income quintile, having savings of more than £1,500 significantly reduces the likelihood of going without essentials or falling into arrears.

Among low-income households with savings below £1,500, 80% reported going without essentials, compared with 40% of those with higher savings. Similarly, more than half (56%) of households with low savings had fallen into arrears, compared with just 13% of those with savings above £1,500. These findings underline the importance of even modest financial buffers.

Households on very low incomes are also far more likely to experience debt-related hardship. In 2024, nearly 1 in 4 households (23%) with annual incomes below £15,000 reported having fallen behind on credit commitments or household bills in at least 3 of the previous 6 months. This compares with just 5% of households earning £50,000–£70,000, and 2% of those earning £70,000–£100,000.

The impact of debt on households’ wellbeing can be profound. The Financial Lives Survey shows that people in low-income households are disproportionately likely to feel anxious, stressed or embarrassed because of holding debt. They are also more likely to report relationship difficulties with friends and family, reduced productivity at work or taking time off, increased loneliness, and feeling that there is nowhere to turn for support. Where debt repayments take up a significant share of income, the resulting financial pressure can be enormously stressful.

The latest Financial Lives Survey shows that progress in building savings since the pandemic has been highly uneven. Among households with incomes below £15,000 a year, the proportion with no savings fell only slightly, from 23% in 2022 to 22% in 2024, and remains well above the 2020 level of 19%. While there has been a modest increase in the share of low-income households with savings of more than £10,000 (from 15% to 18% since 2020), gains have been far larger for higher-income households. For those with incomes of £50,000 or more, the proportion with savings above £10,000 rose by 11 percentage points, from 42% in 2020 to 53% in 2024.

The Financial Lives Survey shows some improvement since the peak of the cost-of-living crisis, but large income-related inequalities persist. Among households with incomes below £15,000, the proportion reporting that keeping up with bills was a heavy burden fell from 31% in 2022 to 24% in 2024. Despite this decline, the figure remains 4 percentage points higher than in 2020, reflecting the continued impact of rising living costs combined with limited financial buffers.

In contrast, households with incomes of £50,000 or more have seen a small increase in the share reporting that keeping up with bills was a heavy burden, rising from 6% in 2020 to 8% in 2024. Even so, the gap between income groups remains stark. In 2024, households on the lowest incomes were still around three times more likely than higher-income households to report serious difficulty keeping up with their bills, a disparity that has changed little since 2020.