Personal finance

Average Earners ‘Burning Their Savings’ to Pay Skyrocketing Energy Bills | Personal finance | Finance

Britons earning an average wage are warned that they are likely to have to dip into their savings to cope with rising prices. According to Hargreaves Lansdown, the proportion of middle-income people with enough savings to be resilient will fall below 50% over the next 12 months.

The cost of living crisis will continue to affect Britons’ finances, with many people forced to use their savings to survive the cost of living crisis.

Results from Hargreaves Lansdown’s 2nd Savings and Resilience Barometer, produced with Oxford Economics in July 2022, show that average incomes will be hit hard over the coming months.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Average earners are set to face a savings crisis over the next 12 months as rising prices force them to spend their way through their lockdown economies, so they are ending this period with a horrific weakening of their financial resilience.

“That doesn’t mean they will face greater challenges than those on low incomes, but saving is their Achilles’ heel.”

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Ms Coles added: “While the ONS [Office for National Statistics] data shows most people earning between £30,000 and £40,000 are cutting non-essential spending and using less energy at home, there are other changes to consider, so for example only 32% of this group do more shopping.

“It’s worth taking a close look at your budget, looking not only at which non-essentials you can cut, but also whether you can spend less on the essentials.

“Shopping for everything from cheaper mobile and broadband, to cheaper brands or a cheaper supermarket, can reduce your expenses, help you protect your savings more and retain some of the resilience you’ve built in the past. over the past two years.”