More UK families are saving, but they have “fairly thin financial cushions” in case of emergencies, Aviva’s Family Finances report has found.
According to the insurer’s latest-page Family Finances Report, which tracks the financial circumstance of different UK family types, one-third of all families have less than £500 in savings.
The figure rises phenomenally among single parents and those who are divorced, widowed or separated, with 64 per cent and 46 per cent respectively having less than £500 set aside.
Accordingly, these types of family also have the smallest monthly incomes. Families who are divorced, separated or bereaved with children take home £1315 a month, compared with an average of £2,185 across all family types. Single parents bring in £999 a month, less than half the average monthly take-home income.
Louise Colley, protection director for Aviva, said: “We urge people to take steps to themselves against unexpected financial shocks, as the latest figures show how quickly financial situation can change.”
The report also revealed British families have been enjoying record incomes and falling expenditure over the past three and a half years, with more families are starting to splash out on luxury items such as holidays, leisure goods and satellite television subscriptions, while growing numbers are putting away money for a rainy day.
Ms Colley added: “Britain’s families seem to be recovering well from the financial crisis, saving more and even feeling confident enough to spend a little on luxuries. However, fears about the future, including rising interest rates, as well as increased use of bank overdrafts, indicate that for many people finances are still finely balanced.”
