The economic situation of households in Britain is now more precarious than it was at the peak of the pandemic in the second quarter of 2020, due to rising cost of living.
Scottish Widows, part of Lloyds Banking Group, said 60% of households were unable to save more during the pandemic and that households that had savings are now depleting them at the fastest rate in nine years.
“More than 70% of households will need to resort to savings in the next 12 months to cover their rising costs,” said Emma Watkins, director of Scottish Widows.
UK inflation hit a 30-year high of 6.2% in February, and the state budget watchdog predicts it will peak at a 40-year high of 8.7% at the end of this year due to rising energy costs and wider price increases.
Budget supervisors have also said that the decline in citizens’ real incomes will be the largest since 1956, when records began to run, as wages do not keep pace with wage increases.
Source: Capital
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