Millions of consumers in the UK are failing to put an adequate financial safety net in place, with the savings pots of almost a third of households falling well below the recommended minimum ‘salary cushion’.
While the ideal lower threshold for savings is £5,756, or three months’ average monthly take-home pay, 31% of households have set aside less than £250, with 19% of this figure having no savings in place at all.
The research from HSBC also revealed that those aged 16 to 24 and 35 to 44 are the least likely to have saved a sufficient amount for a rainy day.
Almost 50% of those aged 16 to 24 have less than £250 in savings, while this figure is 42% for those aged 35 to 44. These figures are up from 2011 levels, which were 32% and 35% respectively.
“These findings highlight a lack of financial preparation among the British public that appears to have worsened slightly over the past year,” said Bruno Genovese, Head of Savings for HSBC.
“In today’s uncertain economic climate, it is important that families are setting aside a realistic sum of money to be used in emergencies. As a general rule, a financial safety net of at least 3 month’s salary should be set aside in accessible savings for a rainy day.”
Further figures revealed that women were savvier savers than men; 21% of women admit they have no savings and 13% have less than £250 set aside, compared to 16% and 10% of men respectively.
“By putting away a small amount each month, Britons can help themselves build up an emergency savings pot as provision for any eventuality without having to rely on a solution that could push them into the red,” added Mr Genovese.