British people are trying to beat the cash crunch by diverting savings into emergency funds, new UK national research has revealed.
For many, however, the cost of living crisis and poor pay are making it hard to put away regular savings, the report by money.co.uk savings accounts reveals.
The study shows that more than half (55%) of Brits are currently attempting to put money away for a rainy day fund or emergency pot, showing a clear concern about financial security in the current climate.
The cost of living crisis has been identified as the number one barrier to Brits’ ability to save, with almost six in 10 saying soaring costs are the main reason they’re struggling to save.
Londoners put more into their savings than savvy savers in any other region, with those from the capital saving an average of £762 per month.
In comparison, those in Norwich are managing to save the least – just £295 per month – £467 less than those in London.
TOP 5 CITIES WHERE CITIZENS ARE SAVING THE MOST PER MONTH
LONDON – £762
SHEFFIELD – £706
LIVERPOOL – £706
BIRMINGHAM – £687
CARDIFF – £686
TOP 5 CITIES WHERE CITIZENS ARE SAVING THE LEAST PER MONTH
NORWICH – £295
PLYMOUTH – £394
SOUTHAMPTON – £408
BELFAST – £427
GLASGOW – £459
Generation Z is managing to save an average of £961 per month, more than double the £435 saved by those aged 55 and above.
However, unlike the other generations, saving for an emergency fund is not as important to Generation Z, with more than a third (35%) putting money away simply to pay for holidays.
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “Given the economic climate and, assuming you have the ability to do so, putting money away today to save for an emergency is more important than ever.”
“It’s important people are financially prepared for an emergency – if you need to increase your mortgage payments, bills or other outgoings at short notice, you want to avoid relying on short term loans or an overdraft to support you.”
“Having an emergency fund put away will help you weather any short term fluctuations in outgoings caused by a change in interest rates or utility prices.”
“Even though gas prices have dropped slightly since their peak in July 2022, there’s no guarantee prices won’t go up again, so best to be prepared.”
“Putting away any spare cash into an instant or easy access savings account is a good way to earn money on your savings. Currently, the top easy access account is the Furness Building Society Triple Access Saver with a 5% interest rate. Another option is the Beehive Money Bonus Saver August 2024, which is at 4.9%.”