Household savings worth four times more than in 1975

The average UK household has around four times the level of savings that the typical family had 40 years ago in real terms, a report has found.

The value per household - including deposit savings, pensions and shares - has increased by 294 per cent, from £36,989 in 1975 to £145,566 today, Lloyds Bank said.

The total value of UK household savings stands at about £4.1 trillion, compared with £744bn in 1975 in today’s prices. The number of UK households has grown by 40 per cent over the period, Lloyds said.

The proportion of disposable income that households put away in savings averaged 13 per cent in the 20 years to 1995 against a backdrop of relatively high interest rates, the report said.

This level of savings declined during the noughties, fuelled by high levels of consumer spending and borrowing. The savings ratio fell to 5.5 per cent in 2008, but rebounded a year later to reach 9.3 per cent. Between 2005 and 2015, the average household savings ratio averaged 7.49 per cent.

The report said the popularity of tax-efficient Isas has helped to push levels of deposit savings higher, while over the last 40 years, the value of pensions has grown by seven per cent a year on average - faster than any other form of savings.