Around 1.3 million families across Britain had no savings before the biggest cost-of-living crisis in a generation struck, Resolution Foundation, a think tank, has said.
In the period running up to the coronavirus pandemic (2018 to 2020), nearly half of families across Britain had savings worth less than a month’s income.
While around 4% – 1.3 million families in total – had no savings at all, the Foundation said. More than a quarter (28%) of families with no savings said they simply would be unable to cope with an unexpected expense, while nearly a third (32%) said they would need to turn to friends and family if faced with an unexpected expense,
The report found the poorest tenth of families were four times as likely to report having no savings as the richest tenth of households, at 8% versus 2%.
This savings divide will only have been reinforced during the pandemic, according to the Foundation, as the richest fifth of families were around four times as likely to say they were able to increase their savings during lockdowns as the poorest fifth (47% compared with 12%).
“With many of those families unable to save during lockdowns, they are now approaching the biggest cost-of-living crisis in a generation with no financial buffer." Molly Broome, economist at the Resolution Foundation, said.