Six million households have only five days of savings

wide-eyed piggy bank

Around six million households in the UK would run out of money after just five days if they were faced with redundancy, according to a survey by First Direct.

The survey of over 1,000 households found that 21% have no savings at all, while 7% of respondents have less than £250 set aside for emergencies. This is the equivalent of just three days of the average monthly take home pay.

With the average monthly outgoings of respondents amounting to £1,536 that means savings of £250 would last just five days.

Those aged between 25 and 34 were found to be the least prepared for a financial emergency with 39% admitting to having less than £250 in savings.

Meanwhile, 32% of people revealed that they would be unable to cover their rent or mortgage if they unexpectedly lost their main source of income.

Lack of preparation

"These findings demonstrate a worrying lack of financial preparation among the British public," says Bruno Genovese, head of savings at First Direct.

"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 three months' salary set aside in accessible savings for a rainy day."

He adds: "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."

For the top-paying regular savers on the market, check out our weekly savings round-up.

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