Nearly three-quarters of people fork out on unexpected expenses at least once a year

Low levels of savings put millions at financial risk from unexpected bills

New research from the Government’s Money Advice Service shows that 40% (16.8 million) of working-age people in the UK have less than £100 in savings.

With so many lacking a savings buffer to cover surprise expenses, large numbers of people are likely to turn to credit to cover these costs, putting them at increased risk of problem debt and instability.

However the research showed that many low income earners do save, with 23% of working-age adults on a household income of less than £13,500 had more than £1,000 in savings.

David Rodger, CEO of Debt Advice Foundation said;

“The survey highlights the importance of building a savings buffer so that unfortunate income shocks such as a job or separation don’t land people in financial hot water.

“Those affected by an income shock usually have existing credit commitments at a level they can manage, but there isn’t a buffer of savings for any surprises. Everyone should try and save regularly, even if it’s just small amounts.”