New official data reveals a dip in the amount of money British households are setting aside, signalling a shift in financial behaviour amid ongoing economic pressures.
Savings Rate Declines in Third Quarter
The latest UK national accounts, published by the Office for National Statistics (ONS), show that the Household Saving Ratio decreased in the third quarter of 2025. The ratio fell by 0.7 percentage points to 9.5% for the period covering July to September, down from 10.2% in the second quarter (April to June).
This decline was primarily driven by a reduction in non-pension saving, indicating that people across the country put less money aside during the summer months. The data suggests households may be dipping into savings or choosing not to add to them as readily as in previous quarters.
Context of Caution: Savings Still Historically High
Despite the quarterly fall, economists are quick to point out that the savings level remains elevated by historical standards. Martin Beck, chief economist at WPI Strategy, highlighted that the current ratio is significantly above the average seen in the years preceding the pandemic.
"Although the household saving ratio edged down to 9.5% from 10.2% in Q2, amid a fall in real household disposable income, it remained well above its pre-pandemic 2015-19 average of 5%-6%," Beck noted. "Households and firms alike continue to behave cautiously."
This sustained caution is reflected in other financial metrics. Household debt as a share of income stood at 116.9% in Q3, a figure that remains close to its lowest level since 2002. Furthermore, the stock of corporate bank debt relative to profits was reported to be near a 25-year low.
Implications for the UK Economy
The combination of a lower savings rate and reduced disposable income paints a picture of a household sector under strain, yet one that is managing its balance sheet conservatively. The high savings buffer, compared to the pre-2020 era, could provide some resilience against future economic shocks or continued inflationary pressures.
However, the downward trend in the saving ratio, if it continues, could signal a gradual erosion of the financial safety net many built up during and after the pandemic. The data will be closely watched by policymakers and the Bank of England for signs of how consumer spending, a key driver of the UK economy, will fare in the coming months.
