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Aviva reports growing fears over income and savings

As inflation bites, families are more worried than ever about the rising cost of living, according to research from the latest Aviva Family Finances Report.

While families saw annual inflation increase on essentials such as food (+6.4%) and fuel and lighting (+7.45%), monthly incomes fell by 2% from £2,062 (May) to £2,018 (Aug). Women’s monthly income fell 8% from £1,935 (May) to £1,777 (Aug).

The typical UK family has just £982 (Aug) in savings, down 16% from £1,163 (May). However, while average savings have fallen, this might be because the smaller savings pots of some new savers have brought down the overall average.

Since the start of the year, the number of non-savers has fallen from 40% (Jan) to 37% (May) to 36% (Aug). The typical amount saved each month is £34 (Aug), up slightly from May (£32).

The typical UK family now has debts of £79,816 (mortgage and unsecured borrowing) which is higher than the January figure of £73,690. This increase is due to additional mortgage borrowing as unsecured debt actually fell very slightly from £5,360 (Jan) to £5,353 (Aug).

Louise Colley, head of protection for Aviva, comments: “Faced with rising costs and largely static salaries, UK families are more worried than ever about their finances. However, we have seen some positive signs that people are looking to change their financial behaviour for the better.

“For example, almost half of all families now acknowledge they are under-protected, which suggests at least a growing awareness of the need to protect their families. It’s also reassuring to see that some people who had previously not saved have started to put money away; albeit small amounts.”

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