UK households put away less of their income in the first quarter of the year, the first fall in savings trends since 2022.

The higher costs of living, with energy bills staying higher for longer, and less attractive savings proposition from falling interest rates are thought to be to blame.

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The household saving ratio is estimated to have decreased by 1.1 percentage points to 10.9 per cent between January and March, according to the Office for National Statistics, down from 12 per cent in the final quarter of 2024.

It was regular savings, rather than paying into pensions, which prompted the fall. Non-pension saving contributed 6.2 percentage points to the saving ratio, with contributions from pension saving unchanged at 4.7 percentage points.

In the previous quarter, non-pension saving contributed 7.3 percentage points to the saving ratio.

Liz McKeown, ONS director of economic statistics, said: “The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending, although it remains relatively strong.”

The household saving ratio is the proportion of the household sector’s total resources that are available but have not been used for consumption.

Household spending was also revised up from 0.2 per cent to 0.4 per cent as consumers dipped into their savings to spend.

The figures were part of data released in the second estimate of UK economic growth in the first quarter. The ONS said gross domestic product (GDP) rose by an unrevised 0.7 per cent between January and March.

In output terms, growth was driven by an increase in the dominant services sector. Manufacturing and construction also grew, helped by an increase in exports ahead of President Trump’s ‘liberation day’ tariffs that he announced in early April.

The ONS said that while the quarterly outturn was unrevised, monthly growth was slightly higher than first thought in March, at 0.4 per cent compared with the initial estimate of 0.2 per cent. January saw zero growth and February saw expansion of 0.5 per cent, both unrevised.

Recent data from the ONS showed the economy contracted by 0.3 per cent in April after US tariffs and higher employers’ National Insurance were introduced.