Post Office research indicates that lowest earners in UK spend 40% more than their salary each year

The countryís bottom 20% of earners currently spend £1,910 more than their annual salary each year, whilst the UKís top earning individuals on average have an excess of £18,680 at their disposal to save away every 12 months, official figures have indicated. 
In the results of a study published today, the Post Office argued that the savings industry in the UK is currently be held up by the richest people in the country whilst those who currently would be classified as a ëlow earnerí are undergoing severe financial difficulties at present which have meant they have been unable to contribute anything toward saving.
The Centre for Economics and Business Research, which conducted the research on the Post Officeís behalf, highlighted that this pattern has been occurring for nearly 12 years now in a message that will crank up the pressure on all the UKís mainstream political parties to address the ongoing ëcost of livingí crisis which has seen worker wages squeezed to the limit during a time when inflation has consistently outstripped the growth in wages. 
Alarmingly, the trend extends to the bottom 40% of earners in the UK, with the study identifying that on average almost all people in this category have spent more than their salary in the past year. Conversely, the top 40% have all had some form of disposable income to spend how they wish after paying off all their essentials, clearly illustrating the growing wealth gap that is emerging in the UK at present. 
Even at the peak of the global financial downturn back in 2008, the largest income brackets had a sufficient level of disposable income to raise the quantity of their savings each year. In stark contrast the ascension of payday loan firms in the UKís ìWonga economyî highlights the pressure that low and middle income workers have faced on their wages and standards of living, the report argued.  
Henk Van Hulle, head of savings and investments at the Post Office, said: “These figures are incredibly worrying. While the UK’s highest earners continue to account for the majority of savings, the poorest in our society are actually spending more than they earn.”
And even though the economy is rapidly improving and living standards are expected to pick up in the near future, the report has forecasted that the bottom 20% of earners in the UK will continue to overspend beyond their salary well into the next decade, with the current figure of £1,910 only expected to fall to £1,053 by 2018, based on average salaries and spending trends. 
Van Hulle said: “Even with indicators of improvement we are still in the middle of a significant crisis for the UK’s poorest people who are sinking further into debt and unable to save.”
Growing wealth gap
Over 20% of savers are expected to save a small percentage of their annual salary this year compared with 2013, according to a study that analysed the household incomes of 2,001 individuals. This trend is forecasted to be most apparent in the north west of the country where over 30% of people are expected to save a lower portion of their salary than the previous. 
However, the pattern is not expected to be seen commonly in London, with the report highlighting that most of its samples from the capital had identified their intention to place a larger percentage of their incomes into saving this year. 
The collective contents of the study imply that there is a large wealth gap developing in the country which has steadily increased in size in the past decade and will carry on with this trajectory unless measures are taken to protect the finances of the poorest. 
This notion was reinforced by separate data released by the Office for National Statistics this month which illustrated that the UKís richest 1% had acquired as much wealth as the bottom 55% of earners in the country combined and that the average wealth of a household in the South East of Britain was rising on average five faster than all other areas. 
The average wealth of householdís located in the south east of England rose dramatically to £309,000 by the end of 2012, representing a 30% rise from when the first wealth report was released back in 2008. Comparatively, the equivalent figure for the rest of England was just 6%, clearly illustrating the gap in wealth between different geographic areas in the country. 
This notion was compounded by the corresponding figures on the wealth of householdís in the North East, with the report disclosing that the average household worth had dropped to just £143,000, whilst in Scotland this was a marginally higher £165,000. 
Emran Mian, director of the Social Market Foundation thinktank, said: “This is further evidence of a growing savings inequality between high and low earners with wealth becoming concentrated among those who have higher incomes. I can’t see there was anything new in the chancellor’s so-called budget for savers that is going to change things.”
According to the contents of a study released by prominent housing charity Shelter in May, nearly 4 million households across the country currently donít have sufficient finances to afford the costs of their housing. 
They also found that a staggering 44% of working householdís with at least one child aged below 18 could be a single monthís income away from having their homes repossessed if they suddenly became unemployed- primarily because of the lack of money they have saved away. 


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