British savers are putting aside less money than those in many developed countries.
The disappointing level of savings for British households shows that people are living more for today and spending rather than putting money into the bank.
Britain ranks 11 in the table of 18 developed nations and is far behind the savings of the leaders, Australia.
In fact, British savers are on a par with those in the troubled economies of Spain, Italy and Portugal.
Australian savers are stashing £5,000 more in the bank on average each year than their British counterparts, while the top European savers in Switzerland are banking almost £3,300 a year more.
On average, British households are saving £3,781 a year – a 10% fall on the figure of 12 months ago, according to a study by the Post Office.
Vulnerable to financial shocks
If the trend of dropping savings levels continues, British households will only be banking around £3,000 a year and lagging most European countries by 2018.
This lack of a financial cushion makes British households more vulnerable to money shocks, like emergency spending, losing a job or salary cuts.
Across the 18 countries, the average potential annual household savings of the recession hit economies of Spain and Italy are ahead of that of Britain’s £3,634. Spain‘s average is £4,644, while Italy’s comes in at £5,409.
Savers in the United States are slightly worse off than the British – with an average annual potential savings figure of £3,442.
Australian savers have an annual potential saving of £8,821, says the Post Office.
Henk van Hulle, head of savings at the Post Office, said: “Although British savers tell us they feel more confident about the economy, they seem to spending more than they could potentially save.
Potential savings
“This may be good for businesses, but it does leave households open to problems if they face a financial emergency because they don’t have enough savings to cover the problem.”
While British savers could put more money in the bank for a rainy day, they are far from bottom of the table of countries in the study.
Estonia is in last place. Households there can potentially save just £1,099 a year with an outlook of this figure falling to £952 by 2018.
Other low performers are Poland, Slovenia and Slovakia, where households can potentially save between £1,000 and £2,000 a year.
