Third of Britons can’t last a week on savings
According to a shocking new survey, one in three UK adults has not got enough savings to survive just five days without work. The survey, conducted by High Street bank HSBC, discovered that just 30% of Brits have the equivalent of a week’s pay or more in their savings account.
These figures come despite financial advisors suggestions to have at least one month’s worth of savings set aside for emergencies.
Even more worryingly, the research also found that at least 20% of Brits do not have any emergency savings at all.
All this comes just two weeks after the Bank of England’s deputy governor Charles Bean urged the country to indulge in a shopping spree to boost the fragile economy. Astonishingly, Charles Bean admitted that he wanted to see Britons ‘not saving more, but spending more’.
The statement predictably provoked outrage amongst some Brits. Comments on finance website This Is Money ranged from ‘astonished by what Mr. Bean is recommending’ to ‘…bankers suck the lifeblood out of the economy’.
What the survey has highlighted is that Britons are not saving the way they should be – a fact that is in part a testimony to painfully low rates available on ordinary savings accounts. On average, a one-year bond pays just 2.62%, according to Moneyfacts.co.uk. During the same period two years ago, savers could get 6.28% before tax.
Further statistics reveal that just one in five people said they would be able to continue paying their mortgage or rent and other bills in the event of job loss. Whilst 36% said they would have to rely on government support and 22% said they would have to rely on their partner for financial support.
Richard Brown, head of savings at HSBC, said: ‘These findings demonstrate a worrying lack of preparation amongst UK residents’.
‘With the current climate of uncertainty, it is of utmost importance that people are setting aside a realistic sum of money to be used in emergencies.’
‘By putting away a small sum each month Britons can help themselves build up an emergency savings pot as provision for any eventuality.’
Young people were the most unprepared for a financial emergency, with 41% of those aged between 25 and 34 having less than £249 worth of savings.
Women are also decidedly worse off than men, with 20% having no savings at all, and 13% having less than £249, compared with 17% and 9% respectively for men. Furthermore, women are also twice as likely to say they would rely on their partner for financial assistance.
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