Families raid savings to pay bills

Updated: 
broken piggy bankFamily saving has slumped to its lowest level for four years after a fall of billions of pounds as people "raid" their piggy banks to keep afloat, according to a new report.

The TUC said the amount of money being saved by families across the country has fallen from £20.1 billion to £11.4 billion as consumer spending increased by 4.2%.

The union organisation said its research showed how "fragile" the UK's economic recovery is, warning that spending savings was not a sustainable option for the country's prospects.

General secretary Frances O'Grady urged the Government to do more to help boost household incomes, adding: "This analysis shows that Britain's fragile recovery is being propped up by families raiding their piggy-banks.

"While any signs of growth are welcome, it looks like recent news has been driven by running down savings and Government propping up the housing market. This is hardly a sustainable route to recovery, and looks too much like a repeat of trends that drove the crash.

"A sustainable recovery needs to be based on growth, investment and a recovery in living standards. That's why Britain needs a pay rise."

A Treasury spokesman said: "The positive news that has been released right across the economy this week shows that the UK is on the mend. But there is a long way to go and we know that things are still tough for families.

"The Government is determined to take the tough decisions to right what went wrong in the UK economy and deliver sustainable jobs and growth".

© 2013 Press Association