Lack of savings raises debt link

A fifth of Britons have no savings at all, something that may cause acute financial problems for those who get into debt problems.

People who owe money and find it harder to pay off what they owe as a result of changes in circumstance – like losing a job – could particularly impact on those without any savings to fall back on.

The figure was established by Santander, which also found monthly savings deposits have dropped by seven per cent over the last year.

Head of savings at the bank Matt Hall urged those who are not saving to set aside some cash.

"It's especially important given the current economic uncertainty that customers have some savings to protect themselves from unforeseen events," he explained.

A recent study by the Guardian revealed that there are seven million people in Britain for whom the level of financial leeway is very small and an unexpected large bill could spell penury.

By Joe White