The amount Britons save has halved - here's why

Despite the decline, the average value of savings per household is now 4.5 times higher than four decades ago, having risen in real terms from £27,896 to £126,278 today.

On a total basis, savings increased by more than six times, from £555bn in 1974 to £3.5 trillion today.

How Britain squirrels away its money is also changing. Four decades ago 54pc of savings were on deposit in easy to access forms, with 29pc in shares and 17pc in pensions. Today, 38pc is on deposit, 18pc in shares and 44pc in pensions.

The study also pointed to worrying data that showed almost one in three households have no savings and about one in seven have less than £1,500.

“The UK savings market has undergone dramatic change over the last 40 years,” said Andy Bickers, savings director at Lloyds. “There have been substantial rises in the total amount of savings by households as the country has become richer and the population older.

“However, the proportion of income saved by households has halved, with less being held in cash savings than in the past. Getting into the savings habit early will help the younger generations to have a more secure financial future.”

The importance of people saving to guarantee their future was echoed by the Tax Incentivised Savings Association (TISA), a not-for-profit association representing 145 businesses in the savings and investment industry.

“Over the past 25 years both the state and employers have had to significantly reduce the levels of income that people can expect in retirement,” a TISA spokesman said.

“The situation is most acute for those aged 35 or younger, as they are hit by rising housing costs, higher debts and less generous pensions than their parents. They may live longer and be healthier, but their old age may be dogged by financial hardship.”

TISA is now calling for action from industry, government, trade associations and consumer groups to work together to “demystify” savings to encourage saving by younger generations.

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