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Many unprepared for financial slings and arrows

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Millions of people are failing to put aside enough money to cover themselves for a financial emergency, according to research from savings account provider Birmingham Midshires (BM).

BM asked 2,000 people which potential emergencies or surprise costs they would be able to afford should they suddenly have to do so.

The eventuality that people are least prepared for is caring for elderly relatives and meeting the costs of long-term care.

Ninety-five per cent of those surveyed said they would be crippled financially if they had to support an elderly relative in old age.

The situation is worst for those in their twenties, with 97% saying they would struggle to care for their parents should the need arise.

Next on the list is the cost of having a child, with 86% of respondents admitting that they would not be able to cope financially should they or their partner fall pregnant.

Eighty-nine per cent of young adults aged between 18 and 24 could not afford the cost of having a child, with the North East the least prepared region for this outcome.

Eighty per cent of people replied that they would be unprepared for unemployment.

Jason Robinson, director of savings operations for BM, said: “It is alarming that so many people could struggle if hit by a financial emergency or unforeseen cost.

“We would recommend that people save the equivalent of three months’ salary to use as a financial buffer should the need arise.”

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