One in five people have no savings, a report reveals today. It warns that millions are living on a financial precipice, struggling amid government cutbacks and inflationary pressures and at risk of being tipped into debt woes by just a small emergency.
Scottish Widows' annual Savings and Investment Report shows that almost 15 million people in the UK are not making any efforts to save for the future, while eight million have no savings at all. Even among those that do save, a third have less than £1,000, which is smaller than the average monthly cost of meeting mortgage and council tax payments.
And with one in five most worried about job security in the short-term, more jobs lost could leave people with a financial shock from which they are unable to recover.
Iain McGowan, savings expert at Scottish Widows, said: "When people are faced with immediate financial commitments, such as mortgage payments and day-to-day living expenses, they are forced to take a short-term view of their finances. It is absolutely necessary to give those pressing needs priority, but it means millions are unprepared for the financial needs and challenges that lie ahead."
The report suggests that more people than ever are being forced to turn to their families for financial help. A quarter of parents say they have lent a "substantial amount" to children, often simply to help them meet daily living expenses. Average parental loans now stand at £15,000 – an 11 per cent increase over last year's figures.
Meanwhile grandparents have lent £3,665 on average to grandchildren.
Some 6 per cent of people admitted lending cash to parents with an average amount of £4,371 exchanging hands. Also 9 per cent of people have lent an average of £3,485 to a sibling.