‘Achilles heel’ Middle earners ‘burning through savings’ to pay soaring energy bills

Britons who earn an average wage are being warned they will probably have to dip into their savings to meet rising prices. The proportion of middle earners with enough savings to be resilient will dip below 50 percent over the next 12 months, according to Hargreaves Lansdown.

The cost of living crisis will continue to affect Britons’ finances with many people forced to use their savings to survive the cost of living crisis.

Results from the 2nd Hargreaves Lansdown Savings and Resilience Barometer, produced with Oxford Economics in July 2022, show that average earners will be hard hit over the next few months.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown said: “Average earners are set to face a savings crisis over the next 12 months, as rising prices force them to spend their way through their lockdown savings, so they end this period with a horrible dent in their financial resilience.

“It doesn’t mean they’ll face bigger challenges than those on lower incomes, but savings are their Achilles’ Heel.”

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Ms Coles added: “While the ONS [Office for National Statistics] data shows that most people earning between £30,000 and £40,000 are cutting back on non-essentials and using less energy in the home, there are other changes to consider, so for example only 32 percent of this group are shopping around more.

“It’s worth going through your budget carefully, looking not only at the non-essentials you can cut, but also at whether you can spend less on the essentials.

“Shopping around for everything from cheaper mobile and broadband, to cheaper brands or a cheaper supermarket can shave vital chunks from your spending, help you protect more of your savings, and hang onto some of the resilience you built over the past two years.”

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