£8,000 average shortfall in rainy day savings pots, survey finds

Savers face an £8,000 shortfall between the average amount they would like to have in their “rainy day” fund and what they actually have put away, a survey has found.

On average, people would like to have £12,500 put away in a pot that could be used for a financial emergency, money app Yolt said.

But in reality, the average amount savers across the UK had put away was £4,500.

Yolt’s research also suggests that financial shocks in the last year, such as pay decreases amid the coronavirus pandemic, wiped an average of £6,000 off people’s annual household incomes.

More than one in 10 (13%) people surveyed do not have any money set aside for a rainy day.

And a fifth (21%) of people said they have not managed to save anything during the coronavirus pandemic.

However, among those who have managed to save, there was a difference between those who have been able to work from home and those who have still gone into work.

Savers who have been working from home full time because of the pandemic, who have perhaps also saved money on commuting, have put away £1,750 on average since March 2020, while those who were still going into work have saved £1,250 typically.

Pauline van Brakel, chief product officer at Yolt, said: “It is fantastic to see that many people already have some form of savings set aside to weather any future financial shocks, especially in the face of adversity and uncertain economic conditions.

“However, it is important to note that not everyone is in this position. Some are facing real economic hardship and saving anything at the moment may feel like a tall order for those who have been harder hit.”

Richard Lane, director of external affairs at StepChange Debt Charity, said: “We know that when people don’t have any savings to meet unexpected costs like a car repair or replacing an essential broken household appliance, this can create a need to borrow that can then lead to further debt problems.

“If people lose their income, the absence of savings can hasten debt problems.”

He added: “Although savings aren’t a full protection against debt, they do provide a cushion that can help to tide people over periods of unforeseen difficulty.”

The findings were made following a survey of more than 2,000 people across the UK by Opinium Research in January.