One in three Brits don’t have rainy day savings

Posted on March 31st, 2011 | Categories - News

Extra costs that arise out of the blue cannot be paid for by people who have little in the way of savings.

Credit cards, loans and family members are relied upon to finance unexpected living costs.

A third of Britons do not have enough cash set aside for emergencies, leaving them struggling to pay for unexpected bills, according to a survey carried out by gocompare.com.

The comparison website found that unforseen utility bills, car maintenance costs and dental work could leave many people in dire financial straits.

Just under two fifths of participants said that they have had to contend with a huge bill to get their car fixed and were forced to find the money to pay for the expenses. One in four respondents said they had to gather cash together to pay for a broken household appliance and 14% said they had to pay for vet bills.

The survey also outlined that people who had managed to make a saving had only managed to set aside about £500.

John Miles, business development director at gocompare.com, said: “With the cost of living on the up, it’s no wonder that putting money aside for an emergency or saving for the future would drop down the priority list”.

He added: “People might be organised enough to budget for the usual monthly outgoings such as food, the mortgage and council tax, but one unexpected bill could make it impossible to get by”.

A third of people opted to put the unexpected expenses on their credit card, 10% took out a loan and 24% borrowed money from a family member. Just under two fifths of respondents said they spend everything they earn and ‘live for today’.

Mr Miles said: “It’s all very well enjoying life to the full and living each day like it’s your last, but realistically this isn’t the best way to view things. Getting yourself into debt by lack of planning for the future can lead to misery in the long term. We would recommend putting a few quid aside each month – even if it’s just a tenner – to make it slightly easier when that shock bill lands on the door mat”.