28% of households have less than £250 in savings

New research from direct bank first direct reveals that 28% of households have less than £250 in accessible savings. 

The survey of over 1000 UK households reveals that more than a fifth (21%) have no savings at all to fall back on and 7% have savings less than £250 set aside as a financial safety net. This is the equivalent of just three days average monthly household take home pay**, and with average monthly household outgoings currently £1,536, these savings would last just five days***.   

Those aged between 25 and 34 are the least prepared for a financial emergency; 39% have less than £250 in savings, with 30% saying they have nothing set aside at all. Women are far less prepared than men; 24% admit they have no savings and 8% have less than £250 set aside compared to 16% and 6% of men respectively. Across the UK, people in the North East are least likely to have any savings set aside at all with a third (33%) admitting they have no financial safety net. 

Thirty-two per cent of people admit they would be unable to cover their rent or mortgage at all if they were to unexpectedly lose their main source of income. Worryingly, 11% of people would use a personal loan or credit card and a further 11% their overdraft to help pay for essential outgoings in the event of a redundancy. 

How Brits would cover monthly outgoings if made redundant

1. Expect partner to cover them (26%)
2. Has income protection insurance (16%)
3. Would borrow from family (14%)
4. Would use credit card / personal loan (11%)
5. Would rely on overdraft (11%) 

Bruno Genovese, Head of Savings at first direct commented: 

"These findings demonstrate a worrying lack of financial preparation among the British public. With the current climate of uncertainty, it is of utmost importance that families are setting aside a realistic sum of money to be used in emergencies. As a general rule it is advisable to have 3 month's salary set aside in accessible savings for a rainy day. 

"By putting away small amounts each month Britons can help themselves build up an emergency savings pot as provision for any eventuality without having to rely on a solution that will get them further into debt." 

first direct's tips for setting up an emergency savings fund:

• Set aside a small sum each month into a separate savings account, this could be automatically swept from your current account at the end of each month or mean giving up a treat such as your daily shop-bought coffee
• Choose an easy-access account as you never know when you might need to access your emergency stash
• Shop around for competitive rates on your savings to ensure you are making the most of your emergency fund
• Set a realistic weekly budget and stick to it, this will help you to see where your excess salary goes, and where you can make savings
• Get into the savings habit - set up a monthly standing order into your savings account, that way you won't be tempted not to save for one month

Table 1: Monthly income, outgoings and savings provision of households

-Ends-

For further information please contact Rebecca Hirst on 0113 276 6899, rebecca.hirst@firstdirect.com or Amanda Brown on 0113 276 6700, amanda.brown@firstdirect.com 

Notes to Editors  

*Based on 28% of households surveyed saying they had less than £250 in savings. All figures are based on number of UK households being 21,407,000 (DCLG)

**Average monthly take home pay of those surveyed is £2,427.60 - this is £79.81 per day

*** Average monthly outgoings for those surveyed is £1,535.80 - this is £50.49 per day 

Opinion Matters survey carried out on behalf of HSBC of 1,069 UK adults in November 2011. 

Regional and demographic statistics available on request. 

For the latest updates, visit the first direct Press Office social media newsroom: 

http://www.newsroom.firstdirect.com

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first direct:

• Winner of the Which? Best Financial Provider award 2 years running
• Ranked first in the Retail Banking Satisfaction Study by J D Power & Associates for two years running
• first direct has 1.16 million customers
• 950,000 of them use Internet Banking
• 420,000 customers use SMS message banking. first direct sends around 3.5 million text messages to customers every month
• first direct employs 3,200 people in 2,700 FTE roles at two sites, in Leeds and Hamilton (near Glasgow)
• 44% of first direct's sales are via e-channels
• more than 1 in 4 of first direct's customers join because of personal recommendation
• over 89% of customer contact with first direct is electronic
• first direct handles around 135,000 telephone calls every week
• first direct takes over 54,000 calls (40%) outside working hours each week (Monday to Friday 08:00 - 18:00)
• first direct takes over 1,700 calls a day from abroad
• first direct has been in profit every year since 1995  

HSBC Bank plc: HSBC serves 16.1 million customers in the UK and employs approximately 52,000 people.  In the UK, HSBC offers a complete range of personal, premier and private banking services including bank accounts and mortgages. It also provides commercial banking for small to medium businesses and corporate and institutional banking services. HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc. 

The HSBC Group: HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$2,691bn at 30 June 2011, HSBC is one of the world's largest banking and financial services organisations.