More than one in five (22%) UK adults, a figure potentially equivalent to almost 10 million people, would admit they are unable to save anything on a monthly basis, according to a report by Yorkshire Building Society.

The figure is a significant increase on the 12% who said the same in similar research by the society in 2019.

Yorkshire Building Society’s research, based on a study of 2,000 UK adults, analysed financial resilience among consumers and compared the changing financial behaviours of UK adults over the last five years. It highlighted the impact of economic shocks during that period which include the cost of living crisis, the war in Ukraine and the implications of the COVID-19 pandemic.

The report also underlined the UK’s widening financial wellbeing gap – the gap between non-savers and savers – as a quarter (24%) of UK adults confess to often running out of money before pay day, and just one in five (21%) could only live off their savings for less than a month if they lost their job and didn’t have an income.

At the other end of the scale there are signs of increased savings activity in light of the pandemic, with many people seeing their savings grow under lockdown restrictions. The average UK adult increased the amount they can save each month by almost £100, to £256 from £161 in 2019.

Despite the improvement in the nation’s ability to increase their saving pot, respondents said they require a nest egg of £17,345 to feel financially secure – yet only a third (35%) confirmed they had this figure in cash savings.

“The reality of our analysis shows just how far away we are as a nation from reaching a state where everyone feels they have sufficient reserves to be financially secure” said director of savings at Yorkshire Building Society, Chris Irwin.

“While it’s positive to see that overall the UK’s financial resilience has improved, we hope those who have been able to increase their savings will maintain good money habits and grow their savings safety nets.

“Sadly though, having a savings buffer isn’t a reality for everyone, with many now more exposed than before to financial shocks.”

The society’s latest findings also indicated that debt has risen notably since the onset of the cost of living crisis, with the average person going a further £526 into the red and those aged between 35 and 54 seeing increases by an average of £713 because of rising utility, food and mortgage costs.

As a result, the long-term impacts of the changes in financial behaviour over the last five years have resulted in just 6% of those aged 35 to 54 strongly agreeing they would now have sufficient money when it came to their retirement, and just 9% of those aged over 55.

“Now more than ever, with current and potential future economic uncertainty, it’s important for people to try and build their financial resilience and for the wider financial services market, and policymakers, to help people to save,” Irwin added.

Share Story: