Some 43% of British adults don’t have any personal savings set aside for unexpected financial events such as unemployment, illness or urgent repairs to their home, according to research from Equifax.
The survey, conducted by YouGov ahead of the recent interest rate rise, found that nearly one third (29%) of people , are concerned about their ability to meet all their financial commitments, for example rent, utility bills or mortgage payments, over the next six months.
Jake Ranson, banking and financial institution expert at Equifax, said: “The extent to which people live pay cheque to pay cheque with no financial cushion is a particular concern in the current uncertain economic environment.
“Debt levels are on the rise and wherever possible consumers should budget for unexpected expenses. The recent interest rate hike highlights the importance of setting aside some cash to counter any financial shocks.
“To help consumers better manage their finances, companies must ensure they offer products that match an individual’s financial capacity in the long term, taking into account economic jolts that could impact their ability to meet repayments.”
The research also found that people are even more worried about their longer term financial commitments, with 37% concerned about meeting their obligations over the next two years. This figure rises to 48% for 35-44 year olds.
Half as many renters (33%) have savings set aside to fall back on compared to homeowners (67%), despite 43% of people who rent expecting their rent payments to increase to some extent in the next year, and of these people, 42% say they’re unable to afford any increase.