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Savings are up, but so are insolvencies; is Britain’s recovery a mirage?

ended 29. October 2025

The Money Charity’s latest Money Statistics (October 2025) suggest the cost-of-living crisis is easing, but the numbers don’t all add up.

Figures show households saving more, real wages rising, and consumer confidence improving. Yet in ONS data released last week, insolvencies, arrears, repossessions and consumer debt are also climbing.

The paradox is clear: on paper we’re getting stronger, but in reality, more people are falling through the cracks.

The Money Charity report showed:

  • Real pay has grown 3.5% since mid-2023 (ONS)
  • The household savings ratio has jumped from 5.1% in Q3 2023 to 10.8% in Q2 2025
  • Consumer confidence is up from –50 to –19 (GfK)
  • But inflation remains at 3.8%, energy bills rose again this month, and taxes are expected to rise in November

So how do we read this mixed picture? A nation apparently saving more but still struggling to stay solvent?

We want your take:

  • Is this a real recovery or just a pause before more pain?
  • Are clients saving from confidence or from fear?
  • How should brokers and IFAs interpret rising savings alongside record household debt?
  • What advice strategies work when the data says growth but the ground still feels unstable?

2 responses from the Newspage community

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Patricia McGirr
Founder at Repossession Rescue Network
Whatever the numbers suggest, the reality tells a different story. Many households are grinding out a Groundhog Day existence, with a long winter ahead. People aren’t saving because they’re comfortable; they’re saving because they’ve lost hope in a reprieve and are preparing for what’s coming next.

Wages may be inching up, but so are taxes, borrowing costs, debt and arrears. The cost-of-living crisis hasn’t gone, it’s just changed shape. Advisers and brokers are dealing with clients who are weary, wary and one bill away from breaking point. The Budget will decide whether this fragile stability holds, or whether another round of strain pushes people past the point of no return.
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Editor
Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
These figures show the impact of Labour’s economic policy. Wages are rising due to inflation-busting public sector pay deals and the higher National Living Wage.

However, those same policies, combined with the increased employers’ National Insurance burden, are squeezing business margins, fuelling inflation, and driving insolvencies among small firms.

The real risk now is stagflation, driven by rising prices, weak growth, and higher unemployment. If that happens, the government’s already fragile fiscal position could quickly deteriorate.