How the Cost of Living Crisis is Impacting Britons' Savings and Pensions in 2025
Recent data reveals that unauthorized Lifetime ISA withdrawals have surged by 139% from 2020/21 to 2023/24, despite penalty fees being applied.
Finder's 2025 data shows the average UK savings stand at £16,067, yet 39% of people have £1,000 or less saved, and 23% have £200 or less.
The ongoing cost-of-living crisis, combined with high living expenses, is forcing many households to pause or stop saving and even dip into their existing savings. Pressures such as city rents and mortgages are common factors.
While the 2020 lockdown period saw a record personal savings rate, this was followed by a period of high prices and interest rates that have eroded these savings and also reduced some individuals' eligibility for means-tested benefits.
Currently, 16% of UK adults have no savings at all, including 18% among Millennials and Gen X.
Profiles of savers vary widely, with some holding substantial pension pots but little in emergency savings, others with near-zero savings, and some balancing modest savings against large pension funds.
Many people worry about facing contingencies such as income loss, rent increases, or debt without savings, which is impacting their retirement plans and housing security.
