A quarter of us forced to give up the saving habit

The first rule of personal finance is that you should have a nest egg for emergencies. Conventional wisdom is that it should be at least the equivalent of three months' income.

But the recession has left some 15 million of us living without an emergency fund, according to the Government-backed National Savings & Investments.

It suggest millions are facing a potential cash crisis if they lose their job or can't work for some reason. People could also be plunged into financial despair if they are forced to face a sudden large expense, such as home or vehicle repairs.

NS&I's latest quarterly savings survey, published this week, shows that almost a quarter of Britons are saving nothing each month, a rise of almost a third over the previous quarter.

For those that are able to save, the average monthly figure has fallen 13 per cent, to £87 a month, down from £100 from the spring.

The figures are the lowest British savings levels for 12 months, with things expected to get worse, not better.

Worryingly, one in four people say they are less likely to save over the next three months.

John Prout of NS&I, said: "When times are tough it can be difficult to save, but even putting away a few pounds each week will help act as a financial cushion, should you face an emergency."

Finding the cash to stash away is the hard part, of course.