Why may household saving potential increase when the working-age share rises and dependency declines?

Correct answer: Lower dependency can leave a larger share of income available for saving

A lower dependency ratio means that, on average, fewer children and older dependents must be supported by each working-age adult. If income does not fall, households may have more money left after meeting essential dependent-related costs such as care, schooling, and daily support. Some of that remaining income can be saved or invested. This is a potential effect, not a guarantee: saving also depends on wages, prices, debt, access to banks, social expectations, and confidence about the future.

Choice A is correct because it explains the income mechanism without claiming that all available money will be saved. Choice B is false because older people do not always save all income. Choice C ignores the real costs of raising and educating children. Choice D is also false because working-age people continue to consume. A lower dependency burden creates an opportunity for higher saving, but good employment and policies are needed to realise it.