According to the insurer’s 24-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 rose 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. Further, few have put in place protection plans to shelter the income they do have.
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 situations can change.”
Accordingly, these families 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 £2185 across all family types.
The report also showed that single parents bring in £999 a month, less than half the average monthly take-home income.
Although the report said that household income was starting to reach high levels not seen since the credit crisis, the asset and savings gaps between family types and regions has continued to widen, with London and the South-East having the highest savings levels, compared with the North and Wales.
How monthly incomes have changed for different families in the past three and a half years:
| Jan 2011 | July 2014 | % change |
Couples with no plans to have children | £2010 | £2217 | 10% |
Couples with plans to have children | £2187 | £2499 | 14% |
Couples with one child | £1964 | £2352 | 20% |
Couples with two or more children | £2301 | £2366 | 3% |
Divorced/separated/widowed with one or more children | £1387 | £1315 | -5% |
Single with one or more children | £906 | £999 | 10% |
Key findings
• Londoners still have the highest average monthly income at £3280 which is 50 per cent more than the average family at £2185.
• The average family house price in London is now £372,931. By contrast, the average family home in Wales is valued at just £165,489.
• Families in the North West are the least likely to be paying into a personal or employer pension, with only 31 per cent doing so compared to 44 per cent of people in both the South East and the South West.
Adviser view
Nick Evans, founder of the Hertfordshire-based One Life Wealth Planning, said: “Planning for future financial stability is going to be a lower priority for those struggling to make ends meet each month. I hope however that this report can highlight the importance of making even a small amount of saving to help people cope with future uncertainties and avoid taking out expensive short-term debts.”
