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Britons losing the savings habit

 Britons losing the savings habit

Category: Savings

Updated: 10/01/2012
First Published: 10/01/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Many Britons have lost the savings habit so much that they would struggle to make the weekend on their savings pot.

Worryingly, figures from first direct show that 28% of households in the UK have less than £250 in savings that they could lay their hands on if circumstances took a turn for the worse.

Reflecting the testing economic environment, more than one in five (21%) of households have no accessible savings, while another 7% have savings of less than £250 set aside as a financial safety net.

Those aged between 25 and 34 are the least prepared for a financial emergency; 39% have less than £250 in savings, with 30% saying they have nothing set aside at all.

Women are far less prepared than men; 24% admit they have no savings and 8% have less than £250 set aside compared to 16% and 6% of men respectively.

Across the UK, people in the North East are the least likely to have any savings set aside at all with a third (33%) admitting they have no financial safety net.

A third of people admit they would be unable to cover their rent or mortgage at all if they were to unexpectedly lose their main source of income.

Worryingly, 11% of people would use a personal loan or credit card and a further 11% their overdraft to help pay for essential outgoings in the event of a redundancy.

"These findings demonstrate a worrying lack of financial preparation among the British public," said Bruno Genovese, head of savings at first direct.

"With the current climate of uncertainty, it is of utmost importance that families are setting aside a realistic sum of money to be used in emergencies.

"As a general rule it is advisable to have three months' salary set aside in accessible savings for a rainy day."

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