Hard on the heels of official figures from the Office for National Statistics (ONS), which show that household savings hit a record low in the first quarter of this year, separate research shows that a huge number of Britons are on the brink of financial disaster, with not enough savings to keep them going for three months if disaster struck.
According to LV, some 65 per cent of those surveyed do not have the recommended financial safety net, with those aged between 25 and 34 who live in rented accommodation being the most vulnerable and among the least financially resilient.
Meanwhile, the ONS figures show that the current UK household savings ratio, meaning the percentage of disposable income that is saved, is just 1.7 per cent, a massive drop from the 9.2 per cent that was the average over the past 54 years. It also halved from 3.3 per cent in the final quarter of 2016 and is the lowest rate since records began in 1963.
The reasons given for not being able to save by the so-called ‘late millennials’, who are most at risk, are student debt and credit card bills, which account for 43 per cent and 32 per cent respectively. In addition, the slump in the value of sterling is thought to have contributed to the lack of saving ability.
Meanwhile, one in five of this group has more than £5,000 in unsecured debt, while 12 per cent have taken a loan from family or friends. Short-term loans often have a crippling rate of interest and the recent rise in these is a result of individuals not having saved enough of a cash buffer.