One in seven people ‘dealing with the cost-of-living crisis with no savings’

More than a third (36%) of savers say they are relying on their savings to get them through the cost-of-living crisis, according to the Building Societies Association (BSA).

However, one in seven (13%) people say they have no savings at all, while a third (33%) say if they lost their income they would not have enough savings to cover their living costs for a month.

The research was released to mark the launch of UK Savings Week, which runs from September 26 to October 2.

This is the first year of the campaign, which follows a collaboration involving credit unions, building societies and other providers, consumer groups and debt charities.

The survey of 2,000 people was carried out in August, before Friday’s mini-budget during which various tax cuts were announced, on top of the energy price guarantee which will put limits on what households pay for their gas and electric.

More than half (55%) say they have reduced the amount they used to save and more than a third (35%) have stopped saving altogether as a result of the cost-of-living crisis.

Nearly two-thirds (64%) of those with no savings say they could save £10 a month, which could help them to gradually build a safety net for an unexpected cost.

The BSA also pointed out that, while finding good interest rates to counter the effects of inflation is important, Bank of England figures indicate that more than £260 billion is currently sitting in accounts paying no interest.

One in four (23%) savers do not check the interest rate paid before they open an account, with a third (33%) never comparing the rate on their savings to other accounts available.

Iona Bain, financial commentator and founder of Young Money, said: “Even a small rainy-day pot to fall back on when an unexpected bill lands can provide security and reduce worry in difficult times.”

Andrew Gall, head of savings and economics at the BSA, added: “Whilst the midst of a cost-of-living crisis might seem like an odd time to launch activities encouraging good savings habits, those who are able to save can benefit from building their resilience to future shocks.

“When, how and how much people save will be different for everyone and UK Savings Week aims to help individuals to save their own way, when they can.

“And for those who are already savers, UK Savings Week aims to help people think about making the most of their savings.”