search
date/time
Yorkshire Times
Weekend Edition
frontpagebusinessartscarslifestylefamilytravelsportsscitechnaturefictionCartoons
12:00 AM 3rd May 2024
frontpage

33% Of Brits Say They Have Less Than £500 In Emergency Savings

 


Photo by Towfiqu barbhuiya on Unsplash
Photo by Towfiqu barbhuiya on Unsplash
With the UK’s inflation rate falling to 3.2%, its lowest since 2021, there’s never been a better time for households to start or add to their emergency saving fund, after a third (33%) revealed they have less than £500 saved, and 1 in 10 (13%) Brits admit to being without any financial safety net at all.

The new research, an extensive 8,000-person study from credit management company Lowell, has revealed the current financial vulnerabilities among people in the UK. It highlights the regions that have the highest proportion of people without emergency savings, emphasising the crucial need to improve financial resilience nationwide.

Alarmingly, 68% of adults in Northern Ireland don’t have any emergency savings, followed by 64% in the West Midlands and 64% in the North East. On a national scale, 59% lack sufficient emergency savings, which is up from 56% in 2020.

See the full list below:
RankRegion% of people without emergency savings
1 Northern Ireland 68%
2 West Midlands 64%
3 North East 64%
4 Yorkshire and the Humber 63%
5 East Midlands 62%
6 North West 61%
7 Scotland 61%
8 Wales 59%
9 Eastern England 59%
10 South West 56%
11 South East 56%
12 London 52%

Despite a third (33%) of UK adults expecting their financial situation to worsen in 2024, the UK’s inflation rate has dropped dramatically since it’s 41-year high of 11.1% in 2022, and it’s expected to continue to fall with reduced energy prices and consumer goods costs.

While this is a positive shift, it’s still crucial to be prepared for an unexpected financial shock. That’s why Lowell have created three essential tips for Brits to start an emergency savings fund, so people can have peace of mind, should they experience an income drop due to health issues or medical bills, unexpected job loss, or sudden home or car repairs.

1. Be flexible with your savings

Being realistic with a savings budget is the first step to steadily building within your means. It will take time to develop a substantial lump sum, but adjusting to the financial climate will allow you to adapt. For example, as inflation rates and energy prices drop, it’s a great time to put as much as you can afford in a savings account. However, keep in mind that other expenses, like council tax and road tax, might increase in the following months, so remember to adjust your savings plan accordingly to stay within your means and on track.

2. Change to an automated mindset

If savings are seen as a payment that automatically comes out of an account, like national insurance or pension payments, the automated transaction can have a positive effect on the mind.

Dr Becky Spelman, Psychologist and Founder at Private Therapy Clinic comments:
“When people see savings as a necessary expense for financial wellbeing, they will begin to view it as a priority. Automatic savings tools make it easier for people to save consistently, and help to normalise it.

“Once people start to see their savings account increasing in value each month, they are likely to feel accomplished, secure, and financially stable. This boost of confidence in their ability to manage money and reach their financial goals is likely to spur them on. The long-term benefits of savings will become clear - a safety net for emergencies, the ability to reach larger financial milestones, long-term financial security, and peace of mind.”


3. Research what additional support is available

If your income has drastically reduced due to job loss or illness, see if you are eligible for benefits you didn’t know about, by using a benefits calculator. Check if you have insurance cover you’ve forgotten about, Accident, Sickness and Unemployement (ASU) cover or legal cover can sometimes be added as an add-on to agreements. And don’t be afraid to speak to your lenders or service providers - they might offer flexible payment plans or even a payment breaks if you’re facing difficulties.

Commenting on the research John Pears UK CEO of Lowell UK said:
“In a year marked by soaring inflation and interest rates, people have had to make tough decision to make ends meet, with the results from our latest survey shining a light on the widespread impact across different regions.
“We hope that the results from our recent survey will help to spark meaningful discussions and encourage people to use this time to assess their financial health and take proactive steps towards greater financial resilience amidst ongoing economic uncertainties.”