19 April 2023

Rising savings balances and reduced credit use signal increasing financial resilience across UK households

  • Savings balances rose 6% between October 2022 and February 2023 as British households brace for a new wave of cost increases
  • Cautious Brits scaled back spend on credit cards, with eating out, holidays and socialising taking the biggest hits
  • Confidence in household finances improved over the period, alongside signs of growing financial resilience

Brits are moving cash into savings, cutting spending and locking into longer mortgage terms as they brace for a new wave of cost increases in April, new TSB bank account data finds.

Savings balances rose 6% while current account balances fell 4% in the period, as Brits moved cash into savings. The number of people who took out new mortgage applications over 35 or more years doubled from 7% to 13% year-on-year.

The data from TSB bank customers and a nationally representative poll of 2,000 UK adults, comes as UK households brace for the impact of rising Council Tax, phone and broadband bills and the change in energy bill support coming into force this April.

Over the period, cautious Brits scaled back spend on credit with fewer falling into arrears, a sign that household finances are increasingly resilient:

  • The number of transactions on credit cards fell 13% between October 2022 and February 2023. 
  • End of month credit card balances fell 0.5% between October 2022 and February 2023.
  • Spend through ‘Buy Now Pay Later’ providers also fell 11% over the period and was down 32% since its Christmas 2022 peak.
  • The cash value of credit card withdrawals at ATMs also fell 8% in the period.

However, greater financial resilience comes with short-term costs as more than three-quarters (79%) of Brits say they have reduced, stopped or delayed spending on non-essentials to help manage their household finances. Among the most common items Brits have cut back on:

  • Eating out or getting takeaways – 48%
  • Holidays (both in the UK and abroad) – 37%
  • Leisure activities (such as socialising, days out, etc) – 32%

Despite financial sacrifices and rising costs, Brits are feeling increasingly confident about their household finances, with the average TSB Money Confidence Barometer Score* rising from 5.6 to 6 this quarter compared to last October.

While nearly half (46%) of Brits believe that their household will be worse off financially in 12 months’ time compared to now, this data marks an improvement from the 6 in 10 (62%) who said they are less well-off now compared to last year.

However, money worries continue to be front of mind for many households despite improving confidence. While more than a quarter (28%) of Brits say they feel ‘in control’ of their household finances, a similar number say they feel ‘worried’ (31%).

Of those who said they believe their household finances will be worse off in 12 months’ time, rising household bills (75%), paying more for food shopping (75%) and fuel and travel (57%) are the leading reasons.

Mark Curran, Customer Banking Director at TSB commented:
“From locking into longer mortgages and reducing spend on credit, British households have taken decisive steps over the last quarter to boost their savings. It’s encouraging to see Money Confidence move in the right direction.

“However, this doesn’t come without sacrifices and money worries. While many are feeling more financially resilient, some are struggling to meet day-to-day living costs and our Money Confidence Experts are introducing more ways to help TSB customers manage their money better.”

To help reduce the nation’s money worries and improve money confidence among those hardest-hit by the cost-of-living crisis, TSB is today announcing new support, including:

  • Lightning Reach, a free one-stop online portal, that identifies and provides access to financial support such as benefits, grants and local discretionary funds – uniquely matched to individuals. Customers can register to see a range of support they may be eligible for in one place and easily apply for multiple types of support directly through the portal.  Lightning Reach can now be accessed on TSB’s Money Worries web page
  • Seven-days-a-week video-call service with TSB Money Confidence Experts to help customers manage debt and budget; review their finances to help pay important bills; and help with everyday banking tasks like online banking. Appointments can be made on TSB’s website.

Media Contacts

Rebecca Kinghorn, Communications Manager | 07825 728 965 | rebecca.jolly@tsb.co.uk

Joseph Eyre, Senior Media Relations Manager | 07483 432 546 | joseph.eyre@tsb.co.uk

Notes to editors

*October 2022–February 2023 inclusive

About the data

  • TSB bank data is based on the saving, spending and money management behaviours of TSB customer bank accounts. Data was captured between October 2022 and February 2023 inclusive and compared month-on-month and year-on-year to determine trends in financial behaviours and overall financial resilience.
  • Please note that comparisons may not represent exact like-for-like dates as the data is calculated in calendar months, some of which are (+/- 3 days) compared to others.

TSB’s Money Confidence Barometer

TSB’s Money Confidence Barometer measures an individual’s confidence in their financial outlook across six different scenarios:

  • Confidence in saving for a comfortable retirement
  • Confidence in putting money aside to pay for things, such as a holiday, new car, home renovation and furniture
  • Confidence in having enough money to pay fixed household monthly outgoings such as rent, mortgage, and bills
  • Confidence in having enough to pay for household day-to-day living costs such as groceries, transport, and daily treats
  • Confidence in paying for unforeseen household expenses like repairing or replacing appliances, car repairs, or other unexpected bills
  • Confidence in having enough money over the year ahead to support yourself

Polling is conducted by Ipsos, on behalf of TSB. Online interviews for this wave of the Money Confidence Barometer were conducted among a nationally representative sample of 2,194 adults aged 18 to 75 in the UK between 31 March – 3 April 2023. This is the third wave of the Barometer, with Money Confidence first measured in June 2021.

The information contained in this press release is intended solely for journalists and should not be used by consumers to make financial decisions. ‚Äč