The escalating cost of living crisis demonstrates the urgent need for Brits to build their financial resilience, a national IFA firm has warned.
According to Continuum, its advisers have experienced more clients than ever asking for ways to support loved ones who are struggling to cope with rising food and energy prices, as well as spiralling inflation.
Richard Watkins, chartered financial planner at Continuum, said it was important for Brits to take action and start building their financial resilience.
He said: “The 21st century has seen major challenges on the financial stability of the western world, a global pandemic, war and climate crises, and we are not even a quarter of the way through.
"We live in an unpredictable world, and one where financial resilience has become an essential component of our wellbeing.
“Financial resilience is the ability for you and your family to control financial shocks, weather those economic and life challenges, provide options to tackle unexpected setbacks, and should form an essential component of your financial life plan.
Your emergency fund should be a reserve separate from your everyday current account.Richard Watkins"Financial resilience is not just about surviving tough times; it is about maintaining a sense of control over your financial destiny and knowing that even if things go awry you have a way to get them back on track.”
This comes as data released last month by Citizens Advice revealed that the charity had offered food bank referrals and other support to 159,360 people by the end of August this year. This is a rise of 16 per cent year-on-year and highlights the rapid increase in the cost-of-living crisis.
The Plymouth-based firm believes a cornerstone of financial resilience is creating an emergency fund to act as a financial well that can be drawn upon when needed.
Continuum’s tips for building an emergency fund include starting small, creating a budget to incorporate savings into monthly outgoings and choosing the right savings medium for the emergency fund so that it can grow the saver’s money.
Watkins said: “Your emergency fund should be a reserve separate from your everyday current account to reduce the temptation to dip into it for non-emergencies. An instant access or seven-day notice savings account is a great option, as it offers both accessibility and a return on your savings.
“Actually building an emergency fund requires discipline and commitment.
"There are after all plenty of other demands on your resources. But it is achievable if you take the right steps to get started.”
Aamina Zafar is a freelance financial journalist
