£371bn savings shortfall facing UK consumers

Consumers are currently facing a £371bn savings shortfall when it comes to feeling able to withstand a financial shock, a new report from Yorkshire Building Society has revealed.

The report, which was conducted in partnership with the Centre for Economics and Business Research (Cebr), suggested that despite Covid-19 restrictions helping many people to increase their savings pots, UK adults require a nest egg of £17,465 to feel financially secure and the average Brit needing an additional £7,220 to reach this goal.

Yorkshire Building Society suggested the financial shock of the last year has caused many to reassess their attitudes towards saving, and as a result almost half (46%) of 18 to 34 year olds state they will save more carefully post-pandemic.

People have also become aware of the impact that money worries can have on their wellbeing, with a third (32%) of men and almost two-fifths (41%) of women stating that greater financial security would make them feel less anxious or depressed.

Despite the year-on-year improvement in the nation’s ability to cope with income shocks, however, the society believes more needs to be done to help people to build their financial wellbeing through savings.

Yorkshire Building Society director of savings, Tina Hughes, commented: “Despite many people managing to put away more money during the past 18 months, this latest research proves just how fragile people’s savings are, and how far away they are from reaching a state where they feel they have sufficient reserves to be financially secure. Whilst some people were able to save throughout the pandemic, that hasn’t been the case for everyone, with many now more exposed than before to financial shocks.

“As a society we know how difficult it is for people up and down the country to save towards their nest egg, and we are committed to helping more individuals build their financial resilience. Money worries can have a detrimental impact on people’s wellbeing and so we are here to help them in times of need.

“However, it’s positive to see that overall, the UK’s financial resilience has improved, and it’s hoped that as we emerge from the pandemic those who have been able to increase their savings, will maintain these good money habits and grow their savings safety nets.”

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