UK consumers saving less as taxes squeeze incomes, data shows

"UK consumers saved less money during the third quarter of the year as higher taxes squeezed disposable incomes. The households' saving ratio which estimates the percentage of disposable income Britons save rather than spend dropped 0.7 percentage points to 9.5%, the Office for National Statistics said. That is the lowest rate for more than a year. Real household disposable income per capita dropped 0.8% as taxes on income and wealth grew."

"It comes just weeks after the chancellor, Rachel Reeves, announced the government will freeze personal tax thresholds for a further three years, a move that will raise billions of pounds for public finances but will drag more workers into higher tax bands. The ONS confirmed on Monday that growth slowed to 0.1% in the third quarter, from 0.2% in the second quarter. The second quarter figure was revised down from a previous estimate of 0.3% growth."

"Danni Hewson, of the broker AJ Bell, said the revision showed just how difficult it is for the government to deliver on its pro-growth promises. It's clear there are huge challenges to overcome if the UK's growth story is going to become more compelling, she said. Persuading people to spend a bit more and encouraging businesses to dust off any expansion plans they'd set aside will require more than just a period free of destabilising speculation."

UK households saved less in the third quarter as higher taxes reduced disposable incomes, with the saving ratio falling 0.7 percentage points to 9.5%, the lowest in over a year. Real household disposable income per capita fell 0.8% as taxes on income and wealth rose. Growth slowed to 0.1% in the third quarter, and the second-quarter growth estimate was revised down. The chancellor froze personal tax thresholds for three years, raising revenue but pushing more workers into higher tax bands. Increases in employer national insurance contributions and prolonged pre-budget uncertainty dampened consumer spending and business investment, complicating efforts to revive growth.

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