The cost of three months’ worth of essentials has increased by £1,028 in the past two years, meaning that more is needed in savings, Hargreaves Lansdown (HL) has revealed.

Figures from the firm’s savings and resilience barometer for January 2024 showed that households on average spend £2,081 on essentials each month.

As a result of inflation, the cost of three months of essentials has increased by £1,028 over the past two years to £6,234, with the cost of three years’ worth of essentials now standing at £74,916, a figure up by £12,339.

HL said that spending on essentials varies wildly with income, with the lowest fifth of earners spending an average of £749 a month on the basics.

The highest fifth of earners were found to spend an average of £3,352.

Head of personal finance at HL, Sarah Coles, said: "While inflation has been sprinting ahead for the past couple of years, it has taken everything we’ve got to keep up with our spending commitments. However, now it has slowed slightly, we need to take stock, because there’s every chance we’ve neglected our emergency savings, and they could be lagging dangerously behind.

"Rapid rises in essentials have caused real problems, especially for those on lower incomes.

"Even those who were able to cut their costs and stay on top of their spending could have had their emergency savings devoured by inflation."

The barometer also found that 63% of people have enough emergency savings to cover three to six months’ worth of essential expenses. However, for those on the lowest incomes, this figure drops to just 27%.

For those in retirement, HL said that emergency savings should cover between one and three years’ worth of cash required for essentials.

Coles added: "After such a long period of inflation, we all need to regroup to check we have enough emergency savings. If you don’t have enough set aside, it’ll feel like a difficult time to build it up, but if you’re waiting for the moment in life when your costs fall and you find yourself with plenty of money, you could wait forever."

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