17% of people have no savings at all according to the Money and Pensions Service, while 26% have less than £100 set aside for emergencies.
This reflects HL findings that one in six people (17%) have been forced to spend their savings to make ends meet during the cost-of-living crisis, and one in ten (9%) have had to borrow money.
Quarter of those who borrowed have put their everyday spending on a credit card, while one in ten took a loan. One in ten borrowers have fallen back on buy-now-pay later, with one in 20 relying on expensive store cards (HL).
The Money and Pensions Service released the survey results this morning: One in six UK adults have no savings | The Money and Pensions Service (maps.org.uk)
HL findings are from a survey of 2,000 people, by Opinium in September 2022.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “We’ve been knocked sideways by rising prices, and the looming recession could deliver the knock-out blow. Soaring prices have forced us to eat into savings and run up debts, so if the recession hits us with a cut in hours, or redundancy, we have nothing to fall back on. When you’re running on empty, there are organisations who can help, but unfortunately most people can’t bear to ask for help.
“Runaway prices have driven a coach and horses through people’s finances. We found that one in six (17%) have been forced to spend their savings to make ends meet, which puts a huge dent in their financial resilience. However, even more worryingly one in ten (9%) have had to borrow money to pay for the essentials.
“A quarter of those who borrowed put their everyday spending on a credit card, while one in ten took a loan. One in ten borrowers have also fallen back on buy-now-pay later, with one in 20 relying on expensive store cards. These may feel like solutions in the short term, but over time they make everything harder, when you have debts to pay and interest charges on top of everything else.
“If you’ve hit the wall financially, it’s tempting to try to plough on, but the best thing you can do is talk to someone and ask for help. There are all kinds of people who can step in, including organisations like Citizens Advice and debt charities like Stepchange. If you’d prefer to stay anonymous, you can still track down guides on dealing with the really difficult things from the MoneyHelper website.
“The Maps research found that around four in five people won’t talk about money. A fifth say it’s because they don’t want to be judged, and a similar number say it’s because they’re embarrassed. But there is really nothing anyone can judge you for, and no reason to feel ashamed. We’ve all been hit with completely impossible price rises on top of a pandemic that left an awful lot of people running on empty. It’s hardly surprising that millions of us are reeling from the impact. The FCA estimates that one in four of us are either facing a financial nightmare – or are just one nasty surprise away from it – so there’s every chance that rather than judging you, whoever you open up to will welcome the chance to talk to you about the problems they’re facing too.”