Household savings under pressure
Latest figures released from direct bank-First Direct have revealed some alarming figures in relation to the amount of people who have little or no savings to fall back on should something unexpected arise.
In a survey of over 1000 UK households more than 21% (over a fifth) had no savings whatsoever to use in an emergency with 7% of those surveyed having less than £250 saved as a safety net.
With the national average monthly household expenditure currently being £1536.00 those savings equate to a 5 days’ worth of security, hardly sufficient with such uncertainty within employment and increased cost of living.
The statistics revealed that people aged between 25 and 34 were the least prepared for financial emergencies with 39% having less than £250 saved and 30% admitting they had no savings whatsoever.
Surprisingly woman proved to be less prepared than men with 24% admitting they had no savings at all and 8% stating they had less than £250 saved. 16% of men by contrast admitted to having no savings with 6% stating they had less than £250.
Geographically people in the North East of England were least likely to have savings put aside with 33% stating they had no financial safety net to fall back on.
The report continued, 32% of people surveyed admitted that if they were to lose their main source of household income then they would be unable to pay their rent or mortgage. Alarmingly 11% of people surveyed admitted that in the event of redundancy they would take out a personal loan or credit card to cover the shortfall with a further 11% stating they would use their overdraught.
The survey demonstrates how tight peoples finances have become. It is clear that it would take only a small percentage increase in the cost of living for people in the UK to find real difficulty covering their monthly outgoings. With this in mind it is essential for people to budget well and ensure where savings can be made EG energy tariffs, shopping bills, mobile phones etc that these are maximised to the full.
Help with debt but no savings
People who have debt problems and don’t have savings will still have a number of available debt solutions open to them. For instance, the debt management plan enables you to repay all of your debt over a longer than agreed period and potentially enable you to freeze your interest and charges.
For more severe debt problems where a debt management plan would take too long there is also the IVA or Trust Deed route as an alternative to Bankruptcy.