Only half of British savers think that they have enough to cope in an emergency, and 9% think they don’t need an emergency fund at all, according to a new survey.
The latest NS&I Quarterly Savings Survey has revealed attitudes towards saving for a rainy day. It found that a quarter (27%) of people with an emergency fund have broken into it when they didn’t need to, and 7% think that “rewarding myself” is an acceptable reason to dip into their rainy day pot.
The average Briton is now saving £96 per month, up from £88 per month in the previous quarter.
The researchers asked people to state why they had dipped into their rainy day fund, or times when it would be appropriate to do so. Essential home maintenance came top at 41%, with paying bills coming second (24%). Next on the list was losing your job (23%) followed by paying for a holiday (18%) and impulse buying (7%).
Experts recommend that everyone have at least three months’ salary in an emergency fund, but only 45% of those surveyed have that amount put away. Of the 53% who think they have enough for an emergency, two fifths said they wouldn’t touch it unless it was a genuine emergency. Thirteen percent admitted that they would dip in whenever they wanted.
John Prout, NS&I Retail Customer Director, said:
“We’re all familiar with the expression ‘saving for a rainy day’ but it is interesting to see how many of us are actually doing this. And, when we are doing it, how many of us are prepared to dip into a rainy day fund when it is not really an emergency.
“By taking control of your finances, and if possible putting aside some money for a ‘rainy day’, you can protect yourself should anything unfortunate happen, and have peace of mind that you have your emergency fund to dig in to, in order to help cover the costs of any unforeseen circumstances.”
These findings highlight the importance of sound financial planning. By creating and sticking to a detailed budget, impulse purchases can be avoided, making it easier to save for a rainy day.