Millions of UK adults are at risk of financial hardship in the event of a loss of income with nearly half (47%) having less than £5,000 saved, research from The Exeter reveals.
Of the same group surveyed one in ten (10%) had less than £500 available to cover essential expenses and even more – one in seven (14%) – had no savings at all.
While financial strain cuts across all age groups, those aged 45-54 appear most at risk. More than half (54%) in this age bracket have under £2,500 saved, and 21% have nothing to fall back on – the highest proportion of any generation.
Of those consumers with savings, those aged 25-34 report mean savings of £14,123, almost double the £7,961 held by 45-54-year-olds.
FINANCIAL VULNERABIILITY
Even with savings pots low, 29% of UK adults say they would still be reliant on their own savings if unable to work due to illness or injury – the most common response overall. Beyond that, many would turn to company sick pay (20%), a partner’s income (17%), or state benefits (12%), while 8% would depend on family or friends for financial help.
The youngest adults (16-24) are the most likely to lean on family, with 30% saying they would turn to relatives or friends for support. By contrast, 20% of 45-54-year-olds say they would rely on a partner’s income, highlighting how both younger and mid-life groups remain financially exposed if their earnings were to stop.
INCOME PROTECTION
Jamie Page, head of protection distribution at The Exeter, said: “These findings underline how even those in the middle of their careers, often at the peak of their earning powers, increasingly have limited savings to fall back on if they were to lose their income.
“Illness or injury can strike at any time and, without a financial buffer, even short periods out of work can create financial strain for UK households.
“It’s never been more important that UK workers have access to financial advice and tools to help them become more financially secure, whether that’s by reducing bills, scheduling regular savings, or taking out protection policies to offer a safety net around their income.”
