Consumers need a minimum of £44,000 in savings to avoid having to make changes to their spending habits as a result of rising living costs, estimates from Hampshire Trust Bank have indicated.

The research from the bank found that over a quarter (28%) of respondents have not made any changes to their financial behaviour throughout the pandemic.

Instead, this group relies on an average savings pot of £43,528 – a figure significantly higher than the average savings of all respondents at £39,883, and substantially more than the majority of the UK population.

With just under a quarter (24%) of respondents indicating they would need more than £100,000, and a further 11% indicating they needed £50,001 to £100,000, Hampshire Trust Bank stated that savers are now depending on having “substantial financial reserves” as the cost of living rises.

The bank also said its study shows that much of the UK now has concerns about the rising living costs, with seven in 10 (70%) stating that rising utility costs is among their biggest concerns. Similarly, over half (53%) stated that the rising cost of fuel is high on their list of worries, while a similar proportion (51%) noted the same about food and drink.

Managing director, savings at Hampshire Trust Bank, Stuart Hulme, commented: “Although wealthier savers haven’t yet felt the need to radically change their spending habits, our research tells us they are becoming more concerned about the cost of living crisis.

“With no easy solution to the current crisis in sight, those who we refer to as being the ‘squeezed middle’ are likely to grow in number, and will include more affluent savers who traditionally held more savings in the bank.”

Hulme added: “Whilst this more affluent group has taken a little longer to start feeling these impact, our research shows they are indeed starting to be concerned about the impact of rising costs – especially as with the rest of us the impact of climbing utility bills and fuel costs.

“This growing group of savers will need to assess the liquidity of their assets and work out the best balance of short and long-term in their savings and investment portfolios to be prepared for what looks set to be a prolonged period of inflationary pressure and associated rising costs.”

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