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Media centre /
Press releaseBRITS ASSESS THEIR EMERGENCY SAVINGS08 April 2009
Britons believe the average amount each person would need to ensure peace of mind to cope in an emergency is £5,368.70 – the approximate equivalent of four months’ of the average person’s take-home income, according to the latest NS&I (National Savings and Investments) Savings Survey. However, nearly a third (32%) of people said that they did not have savings set aside to help them deal with any unexpected events. Over a fifth (22%) said they are putting money away for an emergency, but are not keeping this money separately from their main account – making it difficult to keep their emergency funds separate, and opening themselves to the temptation to use it for everyday expenses. The research suggests a complacent attitude lies behind this risky behaviour. Nearly a third (32%) of people said that they had given a little thought to how they would cope financially with an emergency, but believe that life is too short to worry about such things. For those people without an emergency fund, almost one in ten (8%) stated they had not thought about having one, while 7% have considered it, but do not expect to be affected by an emergency in the near future. Dax Harkins, NS&I’s senior savings strategist said, “We all face the possibility of situations that we simply have no control over – so it’s essential that we are all prepared for any emergency that will require immediate access to money, and ensure we are saving enough to cover us in a crisis. “Last month we published the results of our winter quarterly savings tracker which showed that the main reason the population was saving was to help them cope in case of an unexpected emergency (56%). While this is encouraging, our survey reveals that almost one in ten (9%) Britons think they could only support themselves for one month if an emergency arose – even though the recommendation is to set aside about 3 to 6 months of living expenses to cover any situation.” Even those people who have emergency funds are unsure how to manage them properly. One third (33%) of those with emergency savings had dipped into this fund to buy non-essential items. While a minority (5%) regretted it and were determined not to misuse their money again, just over a fifth (22%) said they saw no harm using this safety fund for everyday items, and would be prepared to do it once more. In a sign of further confusion, Brits would rather go into debt than actually rely on their emergency cash, as 17% said they would rather take out a loan, and 12% would take out a new credit card if they unexpectedly needed more money. Just over half (53%) said they would try to cope by working longer hours or taking on a second job. Nearly two fifths (39%) of people also said that their definitions of financial emergencies have recently changed. Nearly a fifth (19%) say that in the current uncertain economic climate, things they previously did not think were important now always seem like an emergency – while 20% appear less concerned, saying events they previously thought of as an emergency now seem less threatening. “Confusion seems to reign for Britain’s savers as to what counts as a financial crisis, how to save for such an event, and how to manage safety funds.” Harkins added. “Given the current climate, it is even more important to think about this and to start saving money in a separate and easily accessible fund, just in case the unexpected should occur.” Statistics Which steps would you be prepared to take before you used money from your emergency fund? Top five options listed, respondents able to record more than one option
What do you think constitutes a significant emergency? Top five options listed, respondents able to record more than one option
ENDS Notes to editors NS&I’s Savings Survey For a copy of NS&I’s Savings Survey, case studies or further information on the statistics supplied in this release please contact the NS&I media team. Previous copies of the survey are available from http://www.nsandi.com/press-room/savingsurvey/index.jsp. Selected regional data is also available on request. The telephone survey, was carried out by TNS among 1992 GB adults aged 16 and above between January and February 2009. Dax Harkins and other senior NS&I spokespeople are available for interview and high-resolution photographs can be supplied. Contact the media team to arrange an interview or request photographs by email. About NS&I NS&I is one of the UK’s largest financial providers with 27 million customers and over £94 billion invested. It is best known for Premium Bonds, but also offers Inflation-Beating Savings, Guaranteed Equity Bonds and Children’s Bonus Bonds in its range. All products offer 100% security, because NS&I is backed by HM Treasury. NS&I products are available over the telephone, internet, post and by standing order. They are also available through a network of Post Office® branches. Customers can also pick up brochures for our Premium Bonds, Inflation-Beating Savings and Income Bonds at retailer WHSmith in 400 of its High Street stores and 155 of its travel stores.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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