Reports from countries around the world have shown that more people are now putting aside as much money as they can in savings to get them through the ongoing economic uncertainty. Data has shown that while consumer lending has fallen in countries such as the United States, the level of savings deposits has increased with households trying to put aside as much as they can to help them to cope with the worsening financial crisis.
Soaring inflation across the globe has resulted in central banks hiking interest rates from record lows over recent months. This has seen the repayments of those with variable and tracker rate mortgages rocket, which has had a huge impact on household finances. In addition, many central banks have made it clear that they intend to continue hiking interest rates in a bid to tackle inflation, and this means that there is further financial misery on the way for many homeowners.
In addition to this, the cost of energy has soared over recent months, and this has also had a huge impact on household finances. Fuelled partly by the Russian war against Ukraine, energy prices have soared so high that they have pushed many households into fuel poverty. On top of this, the cost of essentials such as food and household products has rocketed, which means that many people have been left struggling even before further interest rate increases are imposed.
Saving Every Cent and the Impact of the Pandemic
In a bid to try and get them through the difficulties being experienced in nations across the world, more people have been trying to make cutbacks wherever possible. This is so that they can make ends meet financially and put every spare cent they have into savings before the financial situation gets even worse.
Many are aware of the difficult period that lies ahead based on predictions over inflation, rising interest rates, and the soaring cost of living. As a result, they are doing whatever they can to try and put extra money into savings so that they have something to fall back on financially.
Fortunately, many people were able to increase their savings when the global pandemic was in full force, as they were unable to go out and spend money like they normally would. This meant that many households were able to put aside more money during that period, which has enabled them to be more financially prepared for the economic problems being experienced at the moment.
However, there are also those who do not have enough cash to even make ends meet in the current financial climate, and this means that they have no chance of being able to save money for the problems to come. This could result in a range of huge issues such as a rise in property repossessions due to many people being unable to afford their mortgage repayments following further interest rate increases. It could also mean families struggling to heat their homes or put food on the table in one of the worst economic situations in decades.