A survey of over 2000 adults by Censuswide for Cirencester has shown that over half of people (54%) believe their savings would not last more than three months if they were out of work , an increase of nearly one third from 2014, when this figure was just 41% of people.
In addition, the number of those whose savings would last over six months has dropped by almost half from 31% in 2014 to just 16% this year. Financial Planners often recommend a minimum of six months’ of earning is kept for a rainy day and often much more.
Those aged 45 or over are increasingly feeling financially squeezed, according to the study. In 2014, 39% of this group said their savings would last over six months in the event of being unable to work through injury or illness, compared with just 25% in 2016. Findings this year showed that the over 45s were also the age group most likely not to save any money each month(34%) compared with the national average of 28%.
Rebecca Young, head of marketing at Cirencester Friendly, said: “These findings paint a concerning picture of the finances of the population, with people’s savings today lasting dramatically less than in 2014. If you are unable to work due to illness or injury, the amount of money provided by the Government via Employment and Support Allowance (ESA) is just over £70 each week – this has decreased by nearly £30 per week in the last two years. At the same time, the number of people with long term savings has dropped by nearly 50%.
“The over 45s are facing these pressure too – in fact more of this generation than any other age group admit that they save nothing each month, leaving them potentially exposed to financial difficulties should their regular income change.”
“It seems we are a nation which is financially underprepared and it is essential that we know options are available to protect against the unexpected and safeguard our finances.”