20% of UK consumers ‘couldn’t handle shock bills’

One in five consumers in the UK do not know how much money they should set aside in order to cope with unexpected bills. 

The latest Lloyds Bank Savings Report highlights how 20 per cent of the UK's population is not aware they should have three months' wages in savings in case they are forced to cope with any unforeseen circumstances. 

This could include redundancy, excessively high repair bills or having to buy a new car. If people are not on a solid financial footing, dealing with these types of issues could push them over the edge.

Some 15 per cent of respondents admitted they have no idea how much money they have in their savings accounts at present.

Andy Bickers, savings director at Lloyds Bank, is worried that so many people do not know how to "financially survive an emergency".

"However, it is reassuring to see an increase in the number of people expecting to save more in the coming 12 months, which should boost savings levels, giving them more security for when they need it most," he added.

Over two-thirds (67 per cent) of those questioned admitted they have dipped into their savings accounts in the past 12 months. While 28 per cent did so to book a holiday, 18 per cent had to cover day-to-day living expenses, while 18 per cent also used the money for one-off purchases. 

Consumers need to be financially responsible if they are to stay in the black, as very often running up debts is a slippery slope they will find it hard to get off. This is why drawing up a budget and sticking to it is so important, as it means people will know where they stand financially every step of the way. 

By Amy White