Money News

6m UK households have less than £250 in savings

Thursday 12 January, 2012

By Martin Fagan

28% of UK households could not survive until the weekend on savings, says first direct.

New research from online bank first direct has revealed that 28% of all UK households have less than £250 in accessible savings.

The survey reveals that 21% of Brits have no savings set aside as a financial safety net and 7% have less than £250-worth of savings to fall back on.

first direct said this is the equivalent of just three days average monthly household take home pay. With average monthly household outgoings currently £1,536, the research showed these savings would last five days.

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

People in the north-east are least likely to have any savings set aside at all, with a third admitting they have no financial safety net.

To cover their income shortfall, first direct says 26% of Brits would expect their partner/spouse to cover them, 16% had insurance protection and 14% would borrow from their family.

"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 month's salary set aside in accessible savings for a rainy day.

If they were to unexpectedly lose their main source of income, 32% of people admit they would be unable to cover their rent or mortgage.

In the event of redundancy, first direct says that a “worrying” 11% of people would use a personal loan or credit card and a further 11% their overdraft to help pay for essential outgoings.

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