Millions of households have been warned over their savings, as Brits continue to grapple with the cost-of-living crisis. This month, a series of household bills have suddenly spiked – from council tax to energy costs, and even the TV Licence fee – in what has been aptly named ‘Awful April‘.
Experts predict the financial wrath with cost the average Brits £360 more over the next 12 months. The huge blow comes amid controversial plans to cut a staggering £4.8 billion of disability payments – with average claimants at risk of losing £1,720.
As a result, many households are living paycheck by paycheck: unable to stash away money for emergencies – or for simple pleasures like a meal out or a Friday night takeaway. According to Birmingham Live, the average amount of people banking with high-street lenders such as Nationwide, NatWest, Santander and Lloyds have around £8,500 in savings. However, experts argue this figure is ‘skewed’ by wealthy Brits who have managed to store millions away over the last couple of years.
Finance experts over at Lightyear recently conducted a study to figure out how many Brits had an emergency fund. “It is recommended that people have between three and six months’ worth of essential outgoings (like rent or mortgage, food, and bills),” they said.
The company found that an alarming one in 10 didn’t have an emergency fund at all, while 23 per cent of participants had saved less than £5,000. However, almost one in three (30 per cent) had managed to set aside £10,000.
The experts warned of ‘financial disaster’ to those with less than £5,000 in their bank account – in case anything unexpected happens. This could be due to your car breaking down, being made redundant, or smaller things like needing an emergency plumber to come around.
WHATSAPP GROUP: Get money news and top deals straight to your phone by joining our Money WhatsApp group here . We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don’t like our community, you can check out any time you like. If you’re curious, you can read our Privacy Notice .
NEWSLETTER: Or sign up to the Mirror’s Money newsletter here for all the best advice and shopping deals straight to your inbox.
If you’re struggling to put money aside each month, it may be worth opening up a Help to Save account. The scheme, which has been extended until April 2027, allows Brits on Universal Credit who earn at least £1 from work to save a maximum of £50 each month.
Brits will earn a 50p bonus for every £1 they manage to save over a four-year period, and all of their savings will be ‘secured’ by the government. “You can pay money into your Help to Save account by debit card, standing order or bank transfer and can pay in as many times as you like, but the most you can pay in each calendar month is £50,” GOV UK said. “For example, if you have saved £50 by 8 January you will not be able to pay in again until 1 February.”
As previously reported, you won’t receive your bonus (aka 50 per cent interest) until the end of the second and fourth year of opening your account. But, if you’re able to save the maximum of £50 every month, you will have saved £2,400 by the end of four years – and a bonus of £1,2000. Even if you’re not able to commit to £50 monthly payments for such a long period of time, stashing away £25 every month means you’ll receive a hefty £600 bonus.
You can open up a Help To Save account here.
*This article does not constitute financial advice. Read the full terms and conditions before opening any type of savings account
Do you have a story to share? Email us at yourmirror@mirror.co.uk for a chance to be featured.
At Reach and across our entities we and our partners use information collected through cookies and other identifiers from your device to improve experience on our site, analyse how it is used and to show personalised advertising. You can opt out of the sale or sharing of your data, at any time clicking the “Do Not Sell or Share my Data” button at the bottom of the webpage. Please note that your preferences are browser specific. Use of our website and any of our services represents your acceptance of the use of cookies and consent to the practices described in our Privacy Notice and Cookie Notice.
