Six in ten households have spent their pandemic savings to keep up with inflation

The majority of families have now spent all their pandemic savings as inflation forces people to dip into rainy day funds, new research suggests.

Six in ten households have spent all their savings to “maintain their lifestyle”, the Centre for Economics and Business Research (CEBR) said.

People earning up to £50,000 will have now blown all the money saved up during 2020 and 2021 unless they have cut back on spending. Families are being forced to spend savings to stand still as the cost of everything from energy to food climbs rapidly.

Average household spending power, which looks at how much families have to spend after taxes and essential bills, has fallen from £243 a week in 2021 to a low of £201 in October 2022, according to CEBR’s Income Tracker produced with Asda.

The typical household had to spend an extra £1,500 just to maintain their standard of living in 2022, the think tank said. 

Read the full article and the referenced Forecasting Eye report.