UK households are struggling to cope with the increasing cost of living as they dip into their savings to cover everyday expenses, new research shows.
Norwich & Peterborough Building Society (N&P) found that half the population have less than £1,000 in accessible savings. However, a quarter of over 55 year olds have no savings at all.
This paints a disturbing picture for the future of personal finances as millions are cutting back and saving little, if nothing at all. One in three people questioned confessed to having no accessible savings and 48% have none or less than £1,000 saved.
The research revealed there is an alarming amount of people living hand to mouth with very little set a side. 77% of people are cutting back on everyday spending and tightening their belts.
“It is extremely worrying that millions of people have no savings whatsoever, and half of the people in many areas have less than £1,000 saved up. With the increase in unemployment it is possibly even more important now for people to have a little put aside for a rainy day,” said Gary Lacey, Savings Product Manager at N&P.
“The common philosophy is that people should try to keep the equivalent of at least a few months’ salary in an accessible savings account in case of emergencies. No-one knows what is around the corner, so if your car breaks down, your washing machine goes haywire or something happens which means you stop earning for a short time, you have money to hand to help tide you over.î
Saving now is tough, but it could be worth having something set aside for emergencies. Compare savings with Money Expert.
The research found that women find it harder to save compared to men as one in three women have no savings compared to one in four men.
Edinburgh is the city with the highest number of people saving and only 16% of those living in the Scottish city have no savings compared to Cardiff which is the city with the highest population of people with no savings whatsoever. Almost half of those living in Cardiff have no savings.