One in ten people have no cash savings at all, and another 21% have less than £1,000 to draw on in an emergency.
The latest research by the Financial Conduct Authority also shows that one in four people in the UK have low financial resilience, meaning that they have missed payments, are struggling to keep up with commitments, or don’t have savings to help them through difficulties.
However, there is also good news. The FCA found when consumers seek support it makes financial pressures more manageable. Of the 1.7 million people who had used a debt advice or debt management service in the previous 12 months, 61% said their debts were more manageable as a result. Lenders also have a range of options available to help people struggling with repayments.
There has also been progress on access to basic banking services such as an increase in consumers who hold current accounts and a reduction in people being denied basic bank accounts.
There are also more people banking online or with a mobile app. 1.2 million adults (2%) were digitally excluded, a dramatic improvement from 6.9 million (14%) in 2017.
Even those who are better off could take steps to improve their long-term financial health. 61% of people with more than £10,000 in investible assets held at least three-quarters of these assets in cash, rather than investments. The FCA wants to see more people holding mainstream investments to improve long-term returns.
Looking towards retirement, the FCA’s survey found that one-third (33%) of adults with a defined contribution pension have less than £10,000 saved.
