A study carried out by HSBC has found that millions of Brits have little or no savings set aside for an emergency.
Rising household bills and fuel costs have made it difficult for Brits to save any money compared to years ago when it was easier to save.
Financial experts have recommended that a minimum of three months’ salary is needed to cover incidents that may occur such as an expensive vehicle bill or redundancy.
The research established that 30% of the people asked had less than £250 saved in case of an emergency.19% admitted to not having any savings at all to fall back on. The amount of people that have less than £250 in savings has increased from 750,000 to 8 million in the past 12 months.
Those aged 16-24 and 35-44 were also found to be least prepared for a financial emergency. Women were found to be the less prepared with 21% admitting they had no savings at all and 10% had less than £250 compared to 16% and 10% of men.
28% also said they would be unable to cover their mortgage or rent payment if they lost their income. However worryingly 10% said they would rely on a personal loan, credit card or overdraft to fund their outgoings.
Bruno Genovese, Head of savings for HSBC comments: “These findings highlight a lack of financial preparation among the British public that appears to have worsened slightly over the past year. In today's uncertain economic climate, it is important that families are setting aside a realistic sum of money to be used in emergencies.
“As a general rule, a financial safety net of at least 3 month's salary should be set aside in accessible savings for a rainy day.”
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By Amanda Bainbridge