Millions live hand to mouth every month and have little, if any, savings
A warning has been issued to households who have less than £5,000 in savings accounts. Finance experts warn it may not have enough of an emergency fund should disaster happen. Over half of people who took a survey revealed how they had less than £5,000 in savings.
Nearly a quarter had less than £500, essentially living hand to mouth each month. Experts say households should aim if possible to have between three and six months’ worth of outgoings tucked away.
This covers payments including mortgage or rent, food and main household bills, and provides a safety net should the worst happen. For money-saving tips, sign up to our Money newsletter here.
The survey suggests a sudden change in circumstances for millions of people could leave them on the brink of financial catastrophe.
The average amount people with the likes of Nationwide, Lloyds, NatWest and Santander have in their savings is around £8,500 – though that figure is skewed by the wealthy who have huge amounts put away and does not reflect the population as a whole.
Millions live hand to mouth every month and have little, if any, savings, reports Birmingham Live.
Money commentators also advise savers to look for the best interest accounts on the market, rather than settling for a standard account available from their existing bank.
Finance experts at Lightyear said: “We asked respondents if they had an emergency fund and if so, how much they had in it.
“One in 10 people (12%) said that they didn’t have an emergency fund at all and 23% have less than £500 saved for emergencies.
“The good news is that a vast majority (88%) of respondents have an emergency fund.
“Luckily 30% of people said they have more than £10,000 set aside.
“It’s recommended that people have between three and six months’ worth of essential outgoings (like rent or mortgage, food, and bills).”
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