More than 10% of UK Citizens have no Savings in Case Household Equipment Breaks, a Car needs to be fixed or building repairs are required.
A new study from independent financial services broker Solution Loans has shown that more than one in 10 Britons don’t have any savings put aside for household emergencies. As the UK enters the coldest part of the year, many homeowners may find themselves needing to replace a boiler, fix a roof or repair a car but many people will struggle to meet these expenses without savings to rely on.
Even those with savings could find that they don’t stretch to cover repair costs. 60% of Britons have savings of £1,000 or less. However, the average cost of a new boiler is just over the one thousand pound mark.
Assuming that households pay the average amount for an item and it last for the average amount of time then householders can expect a fridge-freezer to last 11 years and cost around £500 to replace whilst a new roof should only be required every 30 years but costs a whopping £5,000. Homeowners should save on average £138 per month to ensure they can cover any unexpected problems.
The study did however reveal that 24% of Britons do have over £5000 in savings to cover an emergency. Perhaps unsurprisingly, this varied heavily across age groups with just 7.7% of those aged 18-24 with this level of savings whilst 37% of those aged 55 and over had this level of savings.
Amanda Gillam from Solution Loans said: “Whilst saving isn’t always the most exciting thing a person can do with their money, its vital that if people can save that they put something aside for when times are hard. It’s important to consider the consequences of being caught out if something goes wrong at home and a household item needs to be replaced or repaired.
“Whilst borrowing money can help meet these short-term needs, in some cases unplanned borrowing can lead to people getting into financial difficulties over time. By simply putting away a small of money each month people can avoid these potential problems.”
One commonly recommended tactic to help build up savings is to break the amount down into daily amounts. £138 may sound a lot but is around £4.50 per day, a little more than the price of a cup of coffee or lunch. Once a sufficient level of savings has been reached the excess can then be moved to an ISA, high interest bank account or investment fund where it can increase its value.