Half of UK adults would admit that they only have £250 or less in savings dedicated to emergencies, Starling Bank has found.

The bank’s research revealed that this compares to over a third (36%) that have more than £25,000 stashed away, including 31% of 18-24 year olds.

Starling Bank found that UK adults tend to put away an average £183 a month for unexpected spending, such as bills, repairs or medical expenses.

However, for those saving for a holiday or a new car, these savings increase to £316 and £409 a month.

Despite this, half of Brits have less than £250 in their emergency fund, while 35% have no emergency fund at all. This increased to 48% of those aged 18-24 and 38% of those aged 25-34.

Starling’s research also found a clear need for an emergency fund, with 22% of UK adults having to dip into the emergency fund for unexpected household bills or repairs in the past 12 months, while 20% have had to spend it on motor repairs.

Clinical psychologist, Dr Lenna Vyas-Lee, said: "Despite its importance, saving can seem like a chore. As with so many things, focusing on a positive goal can change behaviour, and language is key. So instead of ‘emergency expenses’, try ‘peace of mind pot’. No more ‘painting fund’, hello ‘interior improvement.”

"While rainy day funds provide security, they may inadvertently reinforce anxiety about the unknown, which can demotivate some individuals. In contrast, saving for joyful experiences focuses on building memories and fostering well-being, which resonates more deeply with human psychological needs. This approach is less about avoiding loss and more about creating meaningful gains."

Retail product lead at Starling Bank, Lora Rowley, concluded: "When people save for something that puts a smile on their face, such as a car, holiday or home deposit, our research suggests they are able to do so quicker than if they are putting savings in a rainy day fund for a potential emergency

"If people can be encouraged to think of saving in a positive way, there’s a chance they’ll put enough money aside to cover unforeseen expenses."

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