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Millions of Brits would last just weeks living off their savings, it has been revealed. Researchers, who carried out a detailed study into the financial commitments of 2,000 adults, discovered that one in three would last less than a month if they were forced to fall back on the rainy day fund.
Due to the high cost of living and hefty mortgage and rent payments, cash-strapped adults are now only saving £132 per month.
One in ten have ‘never’ put money aside for anything, and almost one quarter claim to ‘rarely’ save money to provide a buffer if the worst comes to the worst.
And two thirds admitted credit card debt, old student loans and car repayments are crippling their ability to save, the study by new British bank Aldermore found.
In fact, half admit that after their monthly outgoings are accounted for, there’s simply no money left over.
Aldermore’s managing director of savings, Simon Healy said:
”Having absolutely no resources is very high risk indeed.
”If one of the earners in a household were to lose their job and not be able to maintain mortgage or rent payments it would only be a matter of time before things got difficult.
”People are feeling the squeeze at the moment but even so, it would be best to calculate how much you can afford to realistically put away after you have paid all your necessary outgoings,
”Putting aside just £20 a week can tot up to £1,040 – which could be two mortgage or rental payments for the average person, which could really help if things got tight.
”Some financial experts advise on having six months’ worth of mortgage or rent payments in an emergency fund, but for many people that is simply not achievable.
”Surviving day to day on a credit card is not recommended.”
The research also found that the average household now has outgoings totalling £1,105- more than half of which is rent or mortgage payments, which now average £585.
13% of those polled surprisingly admitted they can’t meet their financial commitments as things are now, while a third said they do manage to pay all the bills every month, but admitted it was a struggle.
In fact, half of Brits admitted they’d last less than 10 weeks on their savings.
Regardless, only 38% of those polled believe it’s essential to have money saved ‘in case things go wrong’; while a blasé one in ten said they want to enjoy their money now and not have it stashed away in a savings account.
A third admitted that if they lost their job, they would have to ask their parents for a hand-out, while one in five would rely on a credit card to get them through a sticky patch.
Either way, it would be a tough change- a massive 76% admitted their current lifestyle is dependent on the money they earn.