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Millions at risk with savings of £100 or less

Two in five of the working population have less than £100 in savings, putting them and their finances at risk if an unexpected bill lands.

The new research, part of the Money Advice Service’s “Closing the Savings Gap” report released today, shows how just one emergency could easily push 16.8 million into debt.

A nation without savings

More than half the adults in Wales (50.1%), the North East (50.7%), Yorkshire and Humber (50.9%), West Midlands (55.2%) and Northern Ireland (56.8%) had less than £100 saved. Only in the South East (30.1%) was that number less than one in three.

The non-saving habit

A quarter of the total working population are classed as “non-savers” in the report.

Many wanted to save, but felt they aren’t able to because of barriers like a lack of spare money, motivation, or even just the skills needed to manage money.

Yet 45% of those with no savings have a household income above £30,000 – so they aren’t classed as “low-income” and should be more able to overcome obstacles and start building up a savings buffer.

On the other hand, there are those who struggle to get by but still manage to save for emergencies. One in four (23%) adults in households earning less than £13,500 have more than £1,000 in savings, and two in five save every or most months.

Barriers to savings

For those who do have cash to spare, attitude can be a big barrier. Just under half the country (49%) said they live for today rather than plan for tomorrow, while only a few less (47%) don’t have any financial goals for the next five years.

A lack of savings can cause much bigger problems if unexpected costs arise that can’t be covered. Close to three-quarters of people experience an unforeseen expense, which could end up being more painful financially than cutting back each month to build a fund.

Ways to get saving

If you’re not saving, or feel you would like to save more, here’s how you can start or get better at putting money away for a rainy day or other goal.

  • Work out your budget to see how much is coming in and going out
  • If your income is lower than your outgoings get some free debt advice to help get finances back on track
  • If you are managing to make ends meet, set yourself a realistic savings goal, start small
  • Make a plan to reach this goal
  • Think about how much time you have to save and work out how much you need to save each month to reach your goal
  • Find ways to cut back on spending each month to help you save
  • Set up a regular standing order to a savings account to get in the savings habit

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