New official figures reveal a dip in the amount of money UK households are setting aside, as economic pressures continue to influence financial behaviour.
Savings Rate Declines Amid Falling Income
The Office for National Statistics (ONS) has published its latest national accounts, showing the Household Saving Ratio decreased by 0.7 percentage points to 9.5% in the third quarter of 2025. This covers the period from July to September. The ratio stood at 10.2% in the previous quarter (April to June).
The decline was primarily driven by a reduction in non-pension saving, indicating that people managed to put less money aside during the summer months. The drop coincided with a fall in real household disposable income, squeezing budgets.
Historical Context and Cautious Behaviour
Despite the quarterly fall, analysts are quick to point out that the savings level remains historically high. Martin Beck, chief economist at WPI Strategy, noted that the 9.5% ratio is still significantly above the pre-pandemic average of 5-6% seen between 2015 and 2019.
"Households and firms alike continue to behave cautiously," Beck observed. This ongoing wariness is reflected in other economic indicators. Household debt as a share of income was 116.9% in Q3, a figure that remains close to its lowest level since 2002. Similarly, corporate bank debt relative to profits is hovering near a 25-year low.
What This Means for the UK Economy
The data paints a picture of a nation still exercising financial restraint despite the easing of the immediate pandemic crisis. The elevated savings ratio suggests a buffer exists for many, which could support future consumer spending. However, the recent dip highlights the immediate pressure from the cost of living and stagnant income growth.
The combination of high savings and low debt levels indicates a potential resilience in the face of economic uncertainty, but also a reluctance to engage in significant spending or investment. This cautious stance by both consumers and businesses presents a complex challenge for economic policymakers aiming to stimulate growth.
