Greater confidence about household financial conditions encouraged people to borrow more in the second half of last year but savings levels continued to rise at the same time.The latest ME Household Financial Comfort Report shows that demand for debt is growing at the same time as more households are saving, and the average amount being saved is growing.Overall, ME's index rose three per cent to 5.59 out of ten in the six months to December. It is the second highest result since the survey was started in 2011. The biggest contributor to the overall increase in financial comfort was a rise in confidence regarding the ability to cope with a financial emergency (specifically, a loss of income for three months). People said they felt more confident about the job market.People under 35 were the exception to this, with a fall in the confidence level on this question.Generally, people were also more confident about their savings. The proportion of households with A$10,000 to $30,000 of cash savings rose from 11 per cent to 14 per cent over the six months to December.Twelve per cent of households reported that they had cash savings of between $100,000 and $500,000 (the highest level in the history of the survey) and three per cent said they had more than $500,000 in savings (also the highest recorded).There was an increase in the proportion of households that reported they were spending less than they earned - up from 47 per cent to 50 per cent over six months. The amount of average monthly household savings rose seven per cent to $798.The number that typically spend all their income went from 43 per cent to 41 per cent, and the number that typically spend more than their income fell from ten per cent to nine per cent.However, 31 per cent of households have less than $1000 in savings and 26 per cent have between $1000 and $10,000.For many people, their level of savings remains a concern. People's three biggest financial worries were the cost of necessities, level of savings and ability to maintain lifestyle in retirement.Overall comfort with debt rose from 6.04 out of ten to 6.29. Retirees were the most comfortable, while single parents were the least comfortable. The proportion of households that increased debt over the six months to December rose one percentage point to 33 per cent, while the proportion that reduced debt remained unchanged at 24 per cent. Average net demand, at nine per cent, was higher than in most previous surveys."From a macroeconomic perspective, lower interest rates, rising house prices and, more recently, strong job gains have supported increased gearing - mainly for residential property," the report said.