Different countries have pretty different ways of handling their money. Some places, people are all about saving – it’s a cultural thing, like they’re really into planning for the future. Meanwhile, in other spots, it’s more about spending what you’ve got right now. It’s not just about personal choices; things like how much people make, inflation, and interest rates also come into play. Plus, the government and social policies can nudge people toward saving or spending. Looking at these differences gives us a sneak peek into how economies work around the world and helps figure out the best ways to keep everyone’s finances in good shape.

Amid the soaring cost of living crisis, The UK ranked 17th in a comparison of disposable household income among different countries, according to a recent study by CityIndex. These findings shed light on the challenges faced by households in maintaining financial stability.

The study analysed global data on household savings, including mean disposable income, mean household savings and long-term interest rates, to ultimately discover the countries with the highest household savings in the world.

Key findings:

• Households in the United Kingdom make almost as much as those in Sweden but they get to save 3 times less 
• Switzerland leads the rating with a total savings score of 9.83/10, and the lowest mean long-term interest rates
• Sweden stands out for lower than average long-term interest rates

The countries with the highest household savings:

#	County	Mean household disposable  income in USD*	Mean household savings in USD from disposable income*	% of disposable  income put  toward savings	Mean  long-term interest rates	Total savings score
1.	Switzerland	$35,311	$5908	17%	1.44	9.83
2.	Luxembourg	$40,395	$3028	8%	2.35	9.69
3.	United States of America	$42,592	$2961	7%	3.21	9.67
4.	Chile	$14,004	$1532	11%	5.19	9.63
5.	Germany	$32,997	$3568	11%	2.28	9.62
6.	Austria	$31,792	$3058	10%	2.61	9.55
7.	Netherlands	$31,304	$2475	8%	2.47	9.51
8.	France	$29,663	$2876	10%	2.62	9.49
9.	Belgium	$29,837	$2778	9%	2.75	9.48
10.	Sweden	$28,611	$2814	10%	2.55	9.47
17.	United Kingdom	$28,222	$918	3.25%	3	9.26

Data is calculated between 2000-2022. *Mean household disposable income & savings are calculated per annum. Exchange rates may have an impact on the final rankings, for clarification see the methodology.

The UK ranked 17th out of the 35 countries analysed. While UK households have a mean household disposable income of $28,222 (£22,956), which is not far from Sweden, which made it into the top 10, only a mere 3.25% is put towards their savings. Amid the ongoing cost of living crisis, essential expenses like housing, utilities, and groceries are dwindling the funds available for savings. With food prices experiencing their most rapid increase in the last 45 years and utility bills soaring, households find themselves with limited support, unsurprisingly resulting in scarily low savings rates. Furthermore, the substantial debt obligations, encompassing loans and mortgages, absorb a significant portion of the income of UK residents, especially now when mortgage rates have peaked.

Top 3 countries with the highest savings per household 

Switzerland residents have the highest household savings with a total savings score of 9.83 out of 10. Households in Switzerland save 17% of their gross income, with $5,908 per year saved on average between 2000-2022. This is 48% higher than the neighbouring country of Austria ($3,058) in the same time period, despite having a similar population size. Switzerland also has the lowest long-term interest rates at 1.44 since 2000 — 63% lower than the long-term interest rates in Luxembourg (2.345).

Luxembourg ranks second with a total savings score of 9.69/10. The country has the second-highest household disposable income between 2000-2022 ($40,398), 35% higher than in the neighbouring country of Belgium ($29,837). Luxembourg residents have mean household savings of $3,028, with 8% of their disposable income put toward savings. Not only this, but Luxembourg’s long-term interest rates stand at 2.35, which are the third lowest interest rates globally behind Switzerland (1.44) and Germany (2.28).

The US ranks 3rd, with a total savings score of 9.67 out of 10. With the dollar exchange rate taken into account,the USA has the highest mean household disposable income in the ranking ($42,592), 45% higher than Canada ($29,442) and 3 times higher than Mexico ($14,102). CityIndex found that American residents have a mean average household savings of $2,961, with 7% of their disposable income going into their savings.

Other countries with notable savings findings  

Chile ranks fourth with a total savings score of 9.63 out of 10. Chile has one of the highest long-term interest rates (5.19) and the lowest mean disposable income at $14,004. Despite this, Chile residents manage to put 11% of their disposable income towards their savings — 3% more than Luxembourg in second place — equating to $1,532 in mean household savings.

Germany, which ranks 5th, was found to have the second highest mean household savings ($3,568), 21% higher than in the neighbouring country of France ($2,876). Not only this, but the country has the fourth lowest long-term interest rates on the list (2.28), 19% lower than in Belgium (2.75)

Sweden stands out for lower than average long-term interest rates. The country ranks 10th, with a total savings score of 9.47 out of 10. Swedish households have a mean household disposable income of $28,611, over double that of Poland ($16,736), putting 10% of this toward their savings on average. Sweden has a lower-than-average long-term interest rate compared to other countries in the ranking (2.55) along with impressive mean household savings ($2,814), 12 times more than Finland ($242).

The government is keen to encourage those on lower incomes to save money.  It’s a good idea because we all need to have a little put by to deal with domestic emergencies or appliance breakdowns.  Even if you rent a home and don’t need to worry about building repairs, you will still need to replace or repair things when they break.  How long could you manage without the washing machine or the kettle?  Ideally, everyone would have a few hundred pounds available all the time for these mini emergencies.  It’s sensible money management and means that you can shop around for the best deal when something breaks rather than having to think about finance or getting a high interest loan.

So how is the government encouraging people to save?

The main way is through the Help to Save Scheme.  It’s a government backed scheme and they will pay a generous bonus to those who are able to keep their savings intact for a four year period.

Can all low income people join the scheme?

Sadly not and for me this is one of the drawbacks of the scheme.  Essentially you need to be working and claiming either Tax Credits or Universal Credit.  The trouble is that this excludes anyone on a low income who isn’t working, which will include the sick and the disabled.  People without a job still need some modest savings to deal with things that come up and it seems shortsighted not to include them.

The good news is that you only need to be eligible when you join the scheme, so it’s worth joining up even if you are only meet the criteria for a short time.

Will it affect your benefits?

Savings can affect benefit payments, but only if you go over £6000 (if on Universal Credit or claiming Housing Benefit) and there is no issue with Tax Credits.

How much can I save?

£50 a month is the maximum allowed within the scheme.  This totals a maximum of £2400 over the course of the 4 year scheme.

How much bonus can I earn?

The maximum is £1200, but to achieve this you will need to pay in the maximum and not touch your money until the end of the 4 years.  You will get the first half of your bonus (up to £600) after 2 years and the remaining bonus (again up to £600) after 4 years.  You can keep and use the first payment of bonus money without affecting your 4 year bonus.

This method of bonus calculation encourages long term savings, so it would be better to have a separate emergency pot of money.  Obviously, that is easier said than done on a low income.

Is it safe?

It can’t really get any safer as it’s backed by the government.

Can I beat that rate of return?

Not easily and not without taking a lot of risks.  This is a guaranteed return and it’s a great rate of return.

If you are eligible for the Help to Save Scheme and can save some money, even if it’s much less than £50 a month, it’s well worth considering taking advantage of the scheme.