25% Of Brits Do Not Have Any Savings For Emergencies

Brits have been reminded of the importance of saving money, after a report found that as many as a quarter do not have cash put aside for emergencies.

GoCompare Money revealed 42 per cent have less than £500 saved for a ‘rainy day’, while the average amount of savings is £1,300 for events such as cars needing repairs or appliances breaking.

Georgie Frost, consumer advocate at GoCompare, said having savings 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,” she stated, adding: “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.”

Ms Frost recommended having at least three months’ worth of outgoings in savings, so they can cover costs for a short time in case they can no longer work.

While Brits are extremely confident in using card merchant services in retail stores, they are less assured with regards to relying on banking institutions.

The report found 21 per cent of adults no longer trust the financial sector following the economic crisis of 2008, and 13 per cent have considered alternative methods of saving other than placing money in bank accounts.

However, GoCompare advises the public to put some money in instant-access accounts so they can retrieve it in an emergency, without having to wait for the fixed term to come to an end or paying a penalty to remove the cash early.

Should there be another credit crunch, only 14 per cent of people said they would have the finances set aside to cope with this.