The household saving ratio, the percentage of personal savings to disposable income, is forecast to fall to its lowest level in 50 years in 2016, according to a new report.
The amount that people are putting aside is set to drop to 3.8 per cent, though this remains higher among older generations.
Current savings levels are expected to grow from £50.5bn in 2016 to £74.4bn in 2026, far below the 2009 peak of £104.8bn the report from the Centre for Economics and Business Research (Cebr) found.
After adjusting for inflation, current household savings levels will remain below the peak level of 16.3 per cent set in 1992.
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“Our report shows a clear generational gulf in savings attitudes and behaviour. After expenditure, baby-boomers on average have more income left over to save,” said David Whitaker, Cebr managing economist.
Baby-boomers, defined as those born between 1945 and 1964, were found to be the most comfortably-off generation when it comes to saving for the future.
While almost two-thirds (63 per cent) of over 55 year olds feel “confident and supported”, only 36 per cent of 35-44 year olds feel the same way.
Meanwhile, company pension enrolment does not appear to be to be putting pressure on people to save. Over a third (39 per cent) said they were no more likely to contribute after auto-enrolment.