8.8m households have £250 or less in savings

More than one-third of households do not have an adequate financial safety net to deal with any unforeseen circumstances. 

HSBC has looked at …

More than one-third of households do not have an adequate financial safety net to deal with any unforeseen circumstances. 

HSBC has looked at the issue in-depth and discovered 8.8 million families only have £250 set aside, a sum of money that is unlikely to help them last longer than a week. 

This highlights the unpreparedness of many Britons, as they are failing to exercise enough caution when it comes to their money matters – a decision that could come back to haunt them if they rack up debt. 

Of the 1,000 adults questioned, 25 per cent admitted they have no savings whatsoever, which represents an increase on the 19 per cent who said the same in 2012. Furthermore, one in ten have less than £250.

Financially unprepared 

Oliver Cook, head of savings at HSBC, said: "The findings indicate that the proportion of Britons who are financially unprepared should they face any unexpected expenses or loss of income has risen steadily over the past year, with an extra 800,000 households admitting to savings of £250 or less. 

"Getting into the habit of saving and making regular savings, no matter how small, can help to build up a financial safety net that avoids having to resort to methods that add to debt. As a target, it's important to keep in mind that as a general rule, a minimum of three months' salary should be available for a rainy day."

When they were asked how they would cope if they lost their income, 30 per cent said they would apply for benefits, 11 per cent would turn to credit and 13 per cent would fall back on their partner to help them out. 

Women appear to be in a more precarious position than their male counterparts, as they are more likely to have no savings at all when compared to men (29 per cent and 19 per cent) or less than £250 set aside (ten per cent and eight per cent).

Some people are not taking saving seriously 

Perhaps unsurprisingly, people in the 18 to 24 age group are faring the worst when it comes to savings, as nearly 40 per cent have next to nothing in savings. More worrying is the fact 33 per cent of 35 to 44-year-olds do not have a rainy day fund, as people in this age range typcially have repsonsilbiiltes including mortgages.

Average monthly outgoings have been calculated at £1,500, which means anyone with only £250 can expect to run out of funds after five days. 

If individuals do not have savings, they could quickly fall into debt if their circumstances change. For example, if they were to lose their job and it took a few months to get a new one, they would be forced to rely on friends, family and various credit options to make ends meet. This is why Britons need to prepare for all eventualities and draw up a monthly budget that includes siphoning off some money for a savings pot. 

By Amy White

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