The savings of individuals of all income levels have been chipped away at significantly during 2011 by rising consumer prices but the impact has been most keenly felt by households in the middle-income bracket.
The common refrain about middle-earners being the hardest hit by the economic downturn in the UK and elsewhere has now been backed-up by the findings of research by the savings and investments company ING Direct. Indeed, in the three months to November middle class families with one parent earning in excess of £47,000 annually saw their savings pot diminish by as much as £2,000.
Costs associated with childcare are a major financial burden and a drain on savings for many middle-income families but rising inflation is the main cause for concern among households in the middle bracket. The rising costs of fuel and energy have damaged the financial position of millions of Britons and middle class couples and families are reportedly finding it increasingly difficult to stretch to an annual holiday.
The figures come from the latest ING Direct Consumer Savings Monitor, which also demonstrated that middle-earners have been choosing to borrow more money as 2011 unfolds and many are planning to fund their Christmas spending through credit cards.
The basic problem illustrated by the ING research and understood as a growing issue for a great proportion of British households when it comes to managing their personal finances is that savings will inevitably need to be turned to when inflationary pressures really begin to take their toll.
“Household finances are under immense pressure given rising unemployment and the fact that wages are still failing to keep pace with the cost of living,” said ING senior economist James Knightly. “In this environment it is unsurprising that many households are running down their savings to finance everyday spending.”
Knightly went on to point out that most analysts and the Bank of England itself are confident tha...Read More