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UK: Family incomes and savings rise but household debt levels reach an all time high


• Average debts peak at almost £13,000 – highest recorded by report series
• But family incomes increase by more than £1,200 a year
• More families get into a regular savings habit, reaching a record high of £96 a month

UK families are experiencing a mixed bag of financial fortunes, the latest Aviva Family Finances Report reveals today. The report, which tracks the financial circumstances of different UK family types, shows that while incomes and savings habits are sneaking upwards, so are typical debts.

Typical family debts stack up to record levels

Despite their growing incomes and a greater commitment to saving every month, UK families are regularly turning to unsecured borrowing. Typical household debt has increased by 38% since May 2012 (£9,314) and now stands at £12,834, the highest since this report series began in January 2011.

The biggest debts have actually been racked up through loans from friends and family, at an average of £2,011 per household, while credit cards add a further £2,006 and personal loans an additional £1,959. Five per cent of families say they now rely on payday loans and a further 3% make use of pawnbrokers.

It is therefore a slight concern that the percentage of families making monthly debt repayments has fallen consistently in the last twelve months from 57% in August 2012 to 51% in January 2013 and just 45% in July 2013.

Good news as family income increases slightly

More positively however, UK families’ typical monthly net income in July 2013 fell just short of the highest figure ever recorded by the report series, which was £2,150 in April 2012.

With £2,108 at their disposal each month – 5% more than a year ago – the typical family has £1,260 more spending power over twelve months than they did in August 2012 when the typical monthly income was £2,003.

Regular family savings see a surge

This extra income appears to be having a beneficial impact on people’s monthly saving habits. The typical family saves or invests £96 per month in July 2013, up by 20% from £80 in January to set a new record for the Family Finances Report.

For the first time since the series began, fewer than one in three families save nothing each month (31%) – a significant improvement on the 40% recorded in January 2011. This edition also breaks new ground in terms of the number of families with no savings put away: down to 23% from a high of 33% in January 2011.

Expenses fall as families cut back on holidays and luxuries

The improvement in savings habits marries up with the fact that typical monthly expenditure among UK families fell for the first time since November 2011. The July 2013 average of £1,748 represents a fall of 4% from the peak of £1,819 in January 2013.

Luxury items are among the first to go when it comes to trimming household expenses. While spending on food has gone up by £14 a month across all families in the last six months alone – equivalent to £168 per year – a range of non-essential items including satellite TV subscriptions and recreation have all been scaled back to compensate. Financial constraints also appear to be prompting more families to forgo a holiday this year, with 51% spending on this expense in July 2013 compared with 54% in August 2012.

Louise Colley, protection distribution director for Aviva says: “Since we began our report series, we’ve seen a common thread of people juggling their finances to balance the family books. As money matters improve in one area, this is often offset in another – and this edition is no different. It’s great to see that families are saving more than ever, but slightly concerning that debt levels are continuing to climb.

“Building a savings pot is a fantastic step, but if debts are growing, families need to consider which is the more pressing need. We’d also urge people to take further steps and think about family protection to cover them against a sudden loss of income. Notably 55% of families say that unexpected expenses are one of their biggest financial fears so having this cover in place can provide invaluable peace of mind.”


Data was sourced from the Aviva Family Finances Report series which used findings from over 18,000 people who are members of one of the six groups of families identified above via Canadean research. This report is a definitive look at the personal finances of families in the UK. Not only does it look at personal wealth, income sources and expenditure patterns but also tracks how these change across the different types of family unit.

In addition to the regular data, in each edition a spotlight will be shone onto a different relevant topic. This issue has a focus on how the cost of sending children to school impacts on family finances.

Download The Family Finances Report July 2013 PDF (0.87MB):

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Notes to editors:

The Aviva Family Finances report is an in-depth study into the financial needs of the 84% of the UK population who live as part of a modern family. Based on customer profiles and Government data Aviva has recognised the six most common types of modern family as:

– Living in a committed relationship with no plans to have children
– Living in a committed relationship with plans to have children
– Living in a committed relationship with one child
– Living in a committed relationship with two or more children
– Divorced/separated/widowed with one or more child
– Single parent raising one or more child alone

About Aviva:

Aviva provides insurance, savings and investment products to 34 million customers worldwide.

We are the UK’s largest insurer with over 14 million customers and one of Europe’s leading providers of life and general insurance. We combine strong life insurance, general insurance and asset management businesses under one powerful brand. We are committed to serving our customers well in order to build a stronger, sustainable business, which makes a positive contribution to society, and for which our people are proud to work.

Aviva Plc is in the top 10% of socially responsible companies globally in the Dow Jones Sustainability World Index. In 2012 we invested £5.7m into our UK communities. One in three of our employees were involved in community investment activities which included giving nearly 30,000 hours.

Aviva is working in partnership with Railway Children through the Aviva Street to School programme to get children living or working on UK streets back into everyday life, especially education. Find out more at

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