Quarter of Brits have no ‘rainy day’ savings

It’s good to be prepared for sudden expenses for example, if your car or your boiler breaks down.  But, new research* shows that a quarter of adults don’t have any savings they can dip into to cover unexpected costs.

Commissioned by GoCompare Money the ‘Rainy Day Savings’ study revealed that while 50% of UK adults save on a regular basis into a bank or building society account; a quarter don’t have any savings at all to cover unexpected bills or emergency costs. 

The survey found that the average sum earmarked for ‘rainy day’ emergencies was £1,300 but, 42% of UK adults have £500 or less set aside.  People aged 65 or over hold the biggest buffer against unexpected expenses with average savings of £1,614; over half (56%) of people in this age group have ‘rainy day’ savings of £2,000 or over.

As part of the survey, people were asked for their thoughts on the banking and financial institutions.  Over a fifth (21%) said after the credit crunch they no-longer trusted the sector; 37% think that banks have done nothing to improve their reputation since the financial crisis; 13% of people have looked at alternatives to traditional bank and building society savings accounts.   

Only 14% of those surveyed said that they feel financially prepared for another economic downturn.

Commenting on the research findings, Georgie Frost, consumer advocate at GoCompare said; “A Rainy Day savings fund is not just a nice thing to have, it is essential.

“Ask yourself how you could cope financially should something go wrong, perhaps with your car or your boiler, or you lose your job or become sick. Without an emergency pot of money to dip into, you might have to borrow to cover unexpected bills, which could leave you further out of pocket in the long run.

“While money is tight for most of us, saving little and often is possible. There are lots of options from using a fancy mobile app that lets you round up your spending to setting up a direct debit to transfer some cash each month into an easy access account that won’t penalise you for withdrawing at short notice.  

“The perceived wisdom is to have at least three months’ worth of outgoings saved as an emergency fund. Official figures** set the average monthly salary around £2,300 - which suggests that many people’s ‘rainy day’ savings typically fall short of the ideal target. But it is important not to let that figure scare you and just get started – something is far better than nothing and it will get you in the savings habit”  

For more information on Rainy Day Savings visit: http://www.gocompare.com/savings/emergency-funds/

-ends-

For further information please contact:

Anders Nilsson or Martyn John at GoCompare on 01633 654 054 / 01633 654 725

Gordon, Jason or Liz at MAW Communications on 01603 505 845

Follow GoCompare on Twitter; @GoCompare

Notes to editors:

*On 12 July 2017, Bilendi conducted an online survey among 2,000 randomly selected British adults who are Maximiles UK panelists. The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.   

**ONS - Average Survey of Hours and Earnings: 2016 Provisional Results (published October 2016).  Median gross weekly earnings for full-time employees: £539.  £539 multiplied by 52 gives an annual figure of £28,028; divided by 12 to give a monthly figure or £2,335 per month.

About GoCompare

GoCompare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.

GoCompare does not charge people to use its services, and it does not accept advertising or sponsored listings, so all product comparisons are unbiased. GoCompare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.

GoCompare does not sell its customers’ data.

When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. GoCompare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest, and has teamed up with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.

GoCompare is the only comparison website to be invited to join the British Insurance Brokers’ Association (BIBA) and is authorised and regulated by the Financial Conduct Authority (FCA).

For more information visit www.gocompare.com and www.gocomparegroup.com