£800bn boost to household assets
Between 2000 and 2009, UK households accumulated £802 billion in new savings (including pensions, shares and deposit savings), according to Lloyds, 46% more than in the 1990s. In ‘real terms’ (i.e. after allowing for inflation), new household savings have risen by 14% over the period.
The research found that the £802 billion in new savings is equivalent to an additional average of £30,105 per household.
The significant increase in new savings was driven by a substantial rise in deposit based savings. Between 2000 and 2009, households put an additional £558 billion in deposit savings with the rising popularity of ISAs helping to support the increase.
Deposit based savings’ share of total new savings increased to 70% in the 2000s compared with 49% during the 1990s.
On an annual basis, the largest total inflow of savings into the UK household sector during the past decade was recorded in 2006 at £134 billion.
Suren Thiru, economist at Lloyds TSB, said: “This has been a significant decade for savers in the UK. The substantial rise of new household savings over the past ten years reflects the extent to which savers have worked hard to build their nest-egg. The level of new households’ savings has weakened somewhat over recent years as a consequence of the financial crisis, the low official bank rate and the well documented repayment of debt during the same period. However, there have been signs of improvement over the past year.”