Nearly 1 in 10 people ‘have no emergency savings’

Millions of households are vulnerable to financial shocks as they don’t have a rainy-day fund - a pot of money set aside for emergencies.

According to Hargreaves Lansdown, nearly one in ten people (8%) don’t have any emergency savings.

Women are particularly likely to have nothing put aside, with 10% having no financial reserve.

Meanwhile, 11% of people aged 35 to 54 - the so-called “squeezed middle” - don’t have any emergency savings either, along with 12% of single adults and 17% of renters.

Vulnerable groups face unique financial pressures

It’s not a coincidence that these groups are more likely to have nothing put aside for emergencies, as they often face very particular pressures and circumstances.

Women, for example, often end up earning less than men and are more likely to take on unpaid caring responsibilities, such as looking after children. 

Single people who live alone, meanwhile, have to shoulder every expense - from rent and bills to food and maintenance - alone.

Many single adults are younger too, meaning they’re also more likely to be on lower incomes or still renting.

People with savings often don’t have much put aside

Even those people who do have some money saved might struggle if they were hit with a sudden and unexpected expense.

Figures showed that:

• 11% have £100 or less
• 18% have £500 or less
• 23% have £1,000 or less

On average, households have £155 left over after covering essentials and typically save around 4% of their income.

But this headline figure doesn’t take different income brackets into account - and the picture for those earning the least is troubling.

Among the lowest-earning 20% of households, the amount left after essential bills are paid drops to just £1 a month - and their savings rate falls to 0.1%. 

Why you need a rainy-day fund

Whether it’s a broken boiler, a car repair or an emergency trip to the dentist, these things are rarely cheap.

And if you’re on a tight budget, even a small shock can have a big impact.

So it’s well worth creating a rainy-day fund, so you can cover these costs without resorting to borrowing or dipping into savings.

A good goal is to have enough saved to cover around three months of your living costs - things like rent, bills, food, and transport. 

Even putting away a small amount into your rainy-day fund regularly could make a big difference if or when you ever need it.

What if I can’t afford to put money aside?

If you’re already feeling stretched to the limit, then putting money into savings might not feel like an option. 
 
But help is out there. 
 
We’re here to listen to you without judgement, understand you and improve your financial wellbeing, whether that’s through:

• helping you budget
• letting you know what benefits you’re entitled to
• recommending debt solutions