Single households have lost out on much of the recovery seen by couples, with only £40 remaining monthly compared to couples’ £385, according to Hargreaves Lansdown.
According to the research, this is £5 more than their pre-pandemic average of £35. Single households have only boosted their savings percentage from 37 per cent to 47 per cent, whereas couples’ savings rate has climbed from 52 per cent to 73 per cent.
Real disposable income remains lower than before the pandemic, although overall financial resilience has increased as a result of major spending reductions. The average household now has £235 left at the end of the month, more than double the pre-pandemic figure of £110.
The share of households with sufficient emergency savings has risen from 47 per cent to 65 per cent, defined as having funds to cover at least three months’ worth of necessary spending—the minimum suggested by advisors.
Furthermore, single-parent households fare very poorly. They have an average of £50 left at the end of the month, with only about one in every four or 26 per cent having enough emergency savings.
The research also found that lower-income earners, renters, and those who remortgage at higher rates are struggling financially. Additionally, there are significant pension gaps, which are anticipated to widen this year.
Hargreaves Lansdown head of personal finance Sarah Coles says: “UK households have knocked money management out of the park. Real disposable income is down since before the pandemic, but people have cut spending hard enough that overall financial resilience has improved. This is an impressive result. It means that, as wages grow ahead of inflation, more households have a chance to get back on track.
“But the improvements haven’t reached into everyone’s finances yet. As life gets easier for some people, it continues to feel like one impossibly difficult thing after another for others. Single people haven’t benefited from the recovery anywhere near as much as those in a couple.
“The HL Savings & Resilience Barometer shows on average people score 61 out of 100 for resilience, up 4 points from 2019, but down 2 points since the peak of resilience during the pandemic – when higher resilience was driven largely by lockdown savings.
“Additional savings are largely responsible for the improvement in resilience. On average, around two-thirds (65 per cent) of households have enough emergency savings, compared to before the pandemic when it was less than half (47 per cent). And we can expect those savings to build, because people have more cash left at the end of the month – at £235 – over twice the pre-pandemic level of £110.
“However, not every aspect of our finances has had a boost. How prepared people are for retirement has actually worsened over this period, and the gap between the pensions we need and those we have has grown.
“At the same time, not everyone has been able to build more savings.The benefits have been felt disproportionately by higher earners. If you split earners into ten groups depending on how much they earn, those in the groups four from the bottom to eighth from the bottom have seen savings scores rise 20 points, while the lowest earners saw them rise just 1.3 points.”