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Study finds 4.3m homes with no savings

Debt charity Consumer Credit Counselling Service has said it is concerned about the low levels of savings of more than 5m UK households.

By Aamina Zafar | Published Aug 18, 2011 | comments

It comes after research commissioned by the charity identified 4.3m households with no savings and 1.1m families with savings of less than £1000.

Delroy Corinaldi, external affairs director for CCCS, said: "Low savings leave many families financially vulnerable and unable to deal with unexpected expenses without resorting to credit.

"Ideally, in addition to long-term savings, people should aim to have at least three to six months of savings set aside as a cushion against an unexpected event.

"While not everyone is in a position to build savings, too many people are falling off a cliff as far as savings are concerned and more needs to be done to help people save and give themselves financial security."

The charity said that people who do not have adequate savings were likely to rely on credit for unexpected purchases.

This CCCS study was backed up by research by the department for business, innovation and skills that found 27 per cent of households with no savings rely on credit for everyday expenditure, compared to only 9 per cent with savings of £1000 to £10,000.

Alistair Cunningham, financial planning director of Surrey-based Wingate Financial Planning, said: "I fear there is little IFAs can do to engrain a savings culture into the UK population. The grim reality is the CCCS figures relate to the 5m poorest households in the UK and when they are more rightly concerned with their subsistence, there is little left to save."

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