Report: Two in 5 Brits unable to save money

Woeful situations exacerbated by increased inflation, stagnant incomes, weak income growth and additional pressure on household incomes

Two out of five people can't afford to save, according to new research published today by Lloyds TSB.

The figures will fuel worries that millions are on the edge of financial disaster with no savings safety net to bail them out if they lose their job or can’t work.

Even those that say they can afford to save are seeing their nest eggs being chipped away, according to the survey. Some 22 per cent have been forced to dip into their savings due to unexpected costs or to pay for day-to-day living items while 12 per cent are being forced to withdraw savings to pay off debt.

And woeful situations are being exacerbated by increased inflation, stagnant incomes, weak income growth and additional pressure on household incomes, according to the bank.

Andy Bickers of Lloyds TSB warned: “Consumers across the nation continue to be affected by the rising cost of living, which impacts if and how much can be saved.”

Last week the Insolvency Service reported that the number of people going bankrupt because they couldn’t afford to repay debt has fallen to its lowest level since 2008, but debt charities warned that the figures were misleading.

Delroy Corinaldi of Step Change said: “The pattern of debt is beginning to change, as households are increasingly falling behind on priority living costs such as council tax, energy bills and rent.”