One in five (10.5 million) Brits have no financial cushion whatsoever and could not support their household for a month if they were to lose their main source of income.
According to a new report from digital financial coaching app Claro, young people are most at risk of financial hardship, with 41 per cent of 18-24 year-olds currently living beyond their means.
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Almost a third (31 per cent) of people in this age group told Claro that they did not have enough savings to last a month if they were to lose their job.
Meanwhile, 39 per cent of British households do not budget, and don’t keep track of their income or expenses. Despite this, two thirds (67 per cent) said that they keep a close watch on their finances, which suggests that they have a good awareness of financial management, but are unsure how to improve their financial situation.
“Whilst we never want people to obsess about finances, it is concerning that 10.5 million adults in the UK have no financial safety net to fall back on – and even more worrying that it is the youngest generation struggling the most,” said Rachel Harte, head of financial planning at Claro.
“With one in three unable to support themselves for longer than a month without their regular income, it’s good for Generation Z to start making good money habits early. A little forward planning goes a long way and can prevent unnecessary stress in the future.”
“Many across the UK may feel they have no money to spare to put into savings – which is particularly true of those who have had wages cut – and that’s understandable in the current climate,” added Harte.
“However, even if it might not seem like it – the smallest amount put aside regularly can eventually build up to provide a safety net for the future.”