Summary:
Director of AA Life Insurance, said the research shows that it is important that individuals have a financial safety net in place and so it is “good to see that so many people are saving”.
A survey carried out for AA Life Insurance shows that more than two-thirds (69%) of individuals say they would have to use their savings to keep themselves afloat if their household lost their main income. Seventeen per cent would be reliant on a credit card, with almost half of under 35s (41%) having to do so.
However, to help prepare for unexpected costs 78% of respondents have savings set aside for emergencies; the average amount held is £9,359. Under 35s are most likely to have emergency savings, though they are the age group which typically has the lowest amount of money saved. Those living in the South East and over 65s have the largest amount of savings.
Mark Huggins, director of AA Life Insurance, said the research shows that it is important that individuals have a financial safety net in place and so it is “good to see that so many people are saving”.
But he warned: “Figures suggest that the average weekly spend of a British family is £517, which would mean that a family with savings of around £9,000 could see them disappear in around 18 weeks.
“The thought of relying on a lower or no income at all can be daunting, especially if there are children or other dependents to think about. I think most people recognise that having a financial plan in place in case something happens to the main breadwinner is a wise thing to do, yet many people understandably find it a difficult topic to broach with their family.”
Survey respondents that would struggle if their household lost their main income say car running costs (54%), utility bills (50%) and other household bills (43%) would be trickiest to pay. Just over a third (36%) say they would find it difficult to pay their rent or mortgage and a quarter (25%) would not be able to afford groceries.
Similarly, two-thirds (61%) say they’d have trouble with other outgoings. Of those, almost seven out of ten (67%) say they’d find it tricky to pay for holidays while half (51%) couldn’t afford to buy a car. Nearly the same amount would have difficulties paying for home improvements (50%) and 37% wouldn’t be able to afford car repairs.
Personal financial management is a subject that is not taught in many schools, but is something that nearly everyone has to deal with in their lives later on. Here are some statistics: Some 58% of Americans do not have a retirement plan in place for how they'll manage their finances when they get old.
While people generally believe they'll need about $300,000 to support themselves in retirement, the average American has only about $25,000 saved at the time of retirement. Average household credit card debt among Americans now stands at a distressing $15,204.
If these facts are alarming to you, and you want to reverse the trend, read on for specific, targeted advice geared towards giving you a better future.
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