One in five Brits have no savings

With many consumers continuing to feel the effects of the wider economic pressures, new research by The Co-operative Bank reveals that one in five Brits (20%) actually have no savings set aside for life's emergencies.

The findings show that In the event of an emergency, those Brits without savings would rely on other forms of borrowing to make ends meet. Over half (53%) said they would turn to credit cards, while borrowing from friends and family (42%) and using an overdraft (26%) were also popular choices.

Perhaps unsurprisingly young people are the most likely age group to struggle to save, with those under 35 years old three times more likely than adults over 55 years old to have no savings.

The research also highlights the most common types of emergencies that lead consumers to dip into their savings. The most common reasons include unexpected bills (53%), household emergencies, such as a boiler breakdown (46%), and loss of employment (45%).  

However the findings also reveal that 1 in 20 people would access money they had set aside for emergencies to pay for hair appointments, cosmetic surgery and even to buy clothes.

Zack Hocking, Head of Savings at The Co-operative Bank, says: "Getting into the habit of putting a small amount of money aside each month can be a lifeline should the unexpected happen. Money might seem tight but by looking at your outgoings it may be possible to make small and regular savings.

"There are many savings products on the market, and people should make sure they look for an account that suits their needs.   For people who may need to dip into their savings, should the unexpected happen, but do not want to lose out on any interest, we have developed a Select Access Cash ISA. This provides the flexibility to make two withdrawals a year, whilst benefiting from tax-free savings at a higher rate."

The Co-operative Bank has launched a wide range of new ISA savings products including an 18 month fixed rate ISA.  More information can be found at co-operativebank.co.uk/savings.