Six million households have only five days’ savings

Posted: January 18, 2012 in Money, World

Around six million households would be unable to survive for more than five days if they stopped being paid, such are the low levels of savings among Britons, new research shows.

A new report from First Direct, the bank, warns that one in three UK households have less than £250 in accessible savings.

A fifth of all households have no savings at all.
The bank said that £250 is the equivalent of three days’ average monthly household take-home pay.

With average monthly outgoing currently at £1,536, these savings would last just five days.

Those aged between 25 and 34 are the least prepared for financial emergency, First Direct said after a survey of over 1,000 households.

Bruno Genovese, head of savings at First Direct, said: “These findings demonstrate a worrying lack of financial preparation among the British public. 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.”

He said that as a “general rule”, it is advisable to have three months’ salary set aside in accessible savings for a rainy day.

A quarter of all people surveyed said that they would expect a partner to cover them if they were made redundant.

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