Over the last three years the proportion of households who say they have some money left at the end of the month after paying bills and debts has fallen continuously, according to Legal & General’s MoneyMood Survey.

Legal & General’s Director Customer Marketing, Claire Stracey commented: “Our research shows that three years ago the number of households with some money left, after paying bills, was much higher than now. This is a concern as it implies that, for some households, their ability to put money into savings, or to spend on non essentials, has been eroded over the period. However, our MoneyMood research also shows that the August increase in interest rates appears to be having a positive impact on the ‘Mood to Save’ in the UK, which is the highest year on year level for the third year, with a corresponding fall in the ‘Mood to Spend’. This is in line with recent figures from the Investment Management Association (IMA) showing that net retail investment funds sales for Q3 were the highest since 2000.”

Claire added: “It will be interesting to see whether the increase in interest rates last week to 5.00% from the Bank of England continues to push the saving momentum up. Clearly if some households are finding their finances under pressure and the current trend is to save rather than spend this could have an impact on spending. Next month we’ll be taking a closer look at what people plan to spend on in the run up to Christmas.”