People have more savings than we thought

The savings held by UK households have been underestimated by a significant margin, according to the Office for National Statistics.

Since 1997 the savings ratio - the proportion of income saved - should have been 3% to 6% higher per year.

So last year's rate of just over 5% was, according to a new, more accurate measure, between 8% and 11%.

Britons have long been criticised for not saving enough, but this new basis for calculating the rate would bring our savings habits more in line with those of countries such as Germany.

The reassessment reflects the growing value of employer-provided pension schemes rather than people setting aside more cash.

Experts had underestimated the funding needed to pay for salary-linked pensions, particularly for former workers in the private sector and local government.

Hence, the pot of savings households will enjoy in retirement is bigger than previously shown in the National Accounts.

The new method of calculation is in line with a worldwide standard being adopted across Europe this year.