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Since the beginning of the coronavirus pandemic, official statistics show that total household savings have increased and total household debt remains mostly unchanged, largely due to a fall in spending on non-essential items over lockdown.

The household savings ratio (household savings as a proportion of household disposable income) increased from 9.6% in Q1 2020 to 29.1% in Q2 of 2020, a record high since the series began in 1987. Deposits in bank accounts increased by £44.6 billion in Q2 2020.

Total household debt was £1,858 billion in Q3 2020, only 2.4% more than the year before. Unsecured debt fell in each month between March and November in total, as many households reduced their spending (and so were less likely to borrow).

While on the whole, household savings have risen and debt has decreased, there is evidence to suggest that some households, particularly those with low incomes, have run down savings and increased debt since the start of the pandemic.

The Office for National Statistics’ Opinions and Lifestyle Survey found that by July, 13.3% of people said they have had to borrow money or use credit more than usual since the coronavirus pandemic.

The Resolution Foundation found that 54% of adults in families from the lowest income fifth borrowed more in March-June to cover everyday costs like food and housing.

Groups which are more likely than average to have taken on more debt since the start of the coronavirus pandemic include renters, people from minority ethnic groups, parents and carers, disabled people and those who are shielding, and young people.

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