Savings

More than 1.3 million households facing the cost of living crisis with no savings to fall back on

MORE than 1.3 million households are facing the cost of living crisis with no savings to fall back on, analysis finds.

And 400,000 say they need relatives and friends to help them with an unexpected bill.

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More than 1.3 million households facing the cost of living crisis without savingsCredit: Getty

Half of the families have savings equivalent to less than a month’s income.

And there is a stark divide between rich and poor – with the less well-off being four times more likely to have no savings.

The figures come from an annual wealth audit carried out by the Resolution Foundation with the Financial Fairness Trust.

People in arrears with bills or loans are also more than twice as likely to report high levels of anxiety as those without arrears, the think tank said.

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Molly Broome, an economist at the Resolution Foundation, said: “The huge wealth gaps in Britain mean around 1.3 million families – especially those on low incomes – have entered the pandemic with no savings.

“With many of these families unable to save during the lockdowns, they are now approaching the biggest cost of living crisis in a generation without a financial buffer.

“Families without savings rely heavily on friends and family to meet unexpected expenses.

“However, there is no guarantee that they will be able to provide support as rising energy bills affect nearly every household in the harsh winter ahead.”

Meanwhile, the Joseph Rowntree Foundation has found that low-income families will give up 26% of their income after housing costs in 2023/24 to pay for gas and electricity – up from just 12% two years before.

A government spokesperson said: ‘We understand people are struggling with rising prices, which is why we have acted to protect Britain’s eight million most vulnerable families with at least £1,200 of direct payments this year with additional support for retirees and those applying for disability benefits. .”