Amid the soaring cost of living crisis, the average household in the United Kingdom is expected to have spent an average of £550 on Christmas festivities this year – an increase of £70 from 2022.
In a recent study conducted by CityIndex, it has been discovered that UK households are saving just $912 (£724) of their disposable income, it is therefore no surprise that 43% of Brits planned to use credit cards to pay for Christmas presents this year.
The study analysed global data on household savings, including mean disposable income, mean household savings and long-term interest rates, to ultimately discover the countries with the highest household savings in the world.
The United Kingdom ranked 17th out of the 35 countries analyzed. While UK households have a mean household disposable income of $28,222 (£22,956), which is not far from Sweden, which made it into the top 10, only a mere 3.25% is put towards their savings.
Amid the ongoing cost of living crisis, essential expenses like housing, utilities, and groceries are dwindling the funds available for savings. With food prices experiencing their most rapid increase in the last 45 years and utility bills soaring, households find themselves with limited support, unsurprisingly resulting in scarily low savings rates.
Furthermore, the substantial debt obligations, encompassing loans and mortgages, absorb a significant portion of the income of UK residents, especially now when mortgage rates have peaked.
Top three countries with the highest savings per household
Switzerland residents have the highest household savings with a total savings score of 9.83 out of 10. Households in Switzerland save 17% of their gross income, with $5,908 per year saved on average between 2000-2022.
This is 48% higher than the neighbouring country of Austria ($3,058) in the same time period, despite having a similar population size. Switzerland also has the lowest long-term interest rates at 1.44 since 2000 — 63% lower than the long-term interest rates in Luxembourg (2.345).
Luxembourg ranks second with a total savings score of 9.69/10. The country has the second-highest household disposable income between 2000-2022 ($40,398), 35% higher than in the neighbouring country of Belgium ($29,837).
Luxembourg residents have mean household savings of $3,028, with 8% of their disposable income put toward savings. Not only this, Luxembourg’s long-term interest rates stand at 2.35, which are the third lowest interest rates globally behind Switzerland (1.44) and Germany (2.28).
The US ranks 3rd, with a total savings score of 9.67 out of 10. With the dollar exchange rate taken into account, the USA has the highest mean household disposable income in the ranking ($42,592), 45% higher than Canada ($29,442) and 3 times higher than Mexico ($14,102).
CityIndex found that American residents have a mean average household savings of $2,961, with 7% of their disposable income going into their savings.
Other countries with notable savings findings
Chile ranks fourth with a total savings score of 9.63 out of 10. Chile has one of the highest long-term interest rates (5.19) and the lowest mean disposable income at $14,004. Despite this, Chile residents manage to put 11% of their disposable income towards their savings — 3% more than Luxembourg in second place — equating to $1,532 in mean household savings.
Germany, which ranks 5th, was found to have the second highest mean household savings ($3,568), 21% higher than in the neighbouring country of France ($2,876). Not only this, but the country has the fourth lowest long-term interest rates on the list (2.28), 19% lower than in Belgium (2.75).
Sweden stands out for lower than average long-term interest rates. The country ranks 10th, with a total savings score of 9.47 out of 10. Swedish households have a mean household disposable income of $28,611, over double that of Poland ($16,736), putting 10% of this toward their savings on average.
Sweden has a lower-than-average long-term interest rate compared to other countries in the ranking (2.55) along with impressive mean household savings ($2,814), 12 times more than Finland ($242).
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