One in three have less than a month’s income saved

7th November 2014

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Over a third of people would not be able to survive for more than month on their savings if they lost their job.

The latest Lloyds bank savings index reveals 35% of people have less than one months’ income – or £2,154 based on average full-time earnings – saved and half the population have less than two months’ income in savings at £4,308.

Just 16% of the population have more than four months’ of income in savings equating to £8,616.

The figures show that despite continued economic improvement, savings levels still remain low. However, people do understand the importance of saving for a rainy day and 87% agreed it was important to have a minimum amount saved to cover unexpected costs.

Half of those surveyed said they would need at least two months of income in emergencies, with this figures being made up of almost a quarter who said they would need four months of salary.

The largest reason for the failure to save remains a lack of spare money. Just under a third, 32%, said they cannot save because of this reason, although the number of people stating this has fallen from 43% last year.

The good news is the number of people who have been able to save has remained stable from previous quarters and 26% are saving regularly throughout the year and one in three haven’t been able to save at all. Sensibly, 84% said they would rather pay off debt before saving and two-thirds expect to save over the next 12 months and a quarter believe they will save less in the next 12 months or stop saving altogether.

Philip Robinson, Lloyds Bank savings director, said: ‘Although confidence in the economy is improving, one in three of us still have less than a months’ income in savings. People do recognise the importance of saving and if they are able to get in to the habit of putting away small amounts each month, the rainy day savings pot will grow as their circumstances improve.’

 

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