George Osborne told MPs in his Budget that the country "borrows too much and saves too little" as he announced a new individual savings account that would allow Britons to save up to £15,000 tax-free.
However despite Osborne's attempt to encourage people to save, Britain's household borrowing is at a record high of £1.43 trillion, equivalent to an average household debt of £54,000.
James Meadway, senior economist at the New Economics Foundation, told HuffPostUK: “George Osborne’s talk of building a ‘resilient’ economy rings very hollow indeed when you see that falling wages and rising household borrowing are the only thing keeping the show on the road. He claims to be cutting back on government borrowing, but this low-wage ‘recovery’ means he expects the rest of us to dig ourselves back into debt again.
“Even Bank of England governor Mark Carney has warned of the dangers here. This isn’t a recovery. This is a relapse back to the debt-fuelled economy of the 2000s. Unless real earnings start to pick up, the risk of a further crash will grow and grow.”
Michael Jarman, head of equity strategy at H20 Markets, told HuffPostUK that the government's Help to Buy mortgage guarantee scheme, which Osborne announced would be extended to 2020, was helping to "repeat the madness".
"Help to Buy takes the government debt and promotes it to the consumer. We're going back to 2008 and repeating the madness."
This comes as Carney warned that low interest rates continued to spark the risk of excessive borrowing, in an echo of the 2008 subprime mortgage crisis.
Speaking at the Mais Lecture in the Cass Business School in London, Carney said: "An environment of relatively low and predictable interest rates could encourage excessive risk taking in financial markets and by households.
"The period of low and predictable interest rates before the financial crisis was in part to blame for the crisis."