Brits not saving enough for rainy day expenses
NS&I’s Quarterly Savings Survey highlight that the average savings level has dropped over the past year, with a growing number of the population finding it difficult to put away enough in order to cope with an emergency. There is also a large proportion that is not saving anything at all.
Over the spring months, the average saver put away roughly £87 each month. This has fallen from £95 in winter and a drop from £100 this time last year, despite income levels remaining broadly stable.
John Prout, Retail Customer Director, NS&I, said: “When times are tough it can be difficult to save but even putting away a few pounds each week will help act as a financial cushion, should you face an emergency. It is worth everyone taking another look at their finances to make sure their money goes as far as possible.”
The findings also show that there are a growing number of people who don’t save anything each month, with nearly a quarter confessing that they saved nothing during the past few months. This is an increase of 17% making it a total of 2.96m people.
NS&I say that the outlook for nation’s savings levels is not optimistic. A quarter said they’re less likely to save over the next three months and nearly half said the amount they’re able to set aside is unlikely to change over the same period. People in their late 30s and early 40s are struggling in particular to save.
This follows a recent report by M&S Money on the average household facing £1,800 in unexpected expenses, and often having to raid savings to cover the costs.
Families can face more than one unforeseen cost in the same month, such as a tax bill and a school trip, which can take family outgoings over the average monthly household surplus of £892.
The most common expense faced by UK households is to pay for an unforeseen car repair bill; more than half have had to pay for this over the past 12 months at an average cost of £268 per repair.
However, while families are able to draw upon their monthly surplus income for smaller unplanned costs, such as children’s hobbies and car insurance excess, it leaves many families unable to save up enough to cover bigger unexpected costs.