Brits stung by unexpected bills

Brits forked-out a massive £48.7 billion on unexpected bills over the last 12 months, according to research from Abbey Savings. Nearly four in five (79 per cent) were hit by an expense that they had not budgeted for, at an average cost of £1,375 each time.

Home repairs make up the biggest proportion of unexpected expenditure, with 36 per cent of Britons spending £1,206 each in the last 12 months – costing £19.2 billion in total. 42 per cent of those surveyed were hit by surprise bills, taxes and fees costing an average of £773 each time and 29 per cent said that unexpected travel expenses cost on average £447 each.

Forgotten birthdays and weddings cost a total of £4.3 billion and medical expenses that weren’t covered by insurance cost the nation £2.1 billion in total. Parking tickets also cost us a whopping £298.2 million!

Over one in three people (37 per cent) dipped into their savings to pay for an unforeseen expense. A further 37 per cent used their credit card and 13 per cent delved into their overdraft. Seven per cent borrowed money off a friend or relative and four per cent sold something they owned in order to pay for them (e.g. on Ebay).

Regionally, those living in the South East were the worst at budgeting, with 83 per cent experiencing an out of the blue expense. Those living in Wales and the South West were the better budgeters, as only 69 per cent experienced an unexpected expense over the last 12 months (compared with a national average of 79 per cent).

The Abbey study also reveals a large split in the how men and women account for upcoming events such as birthdays or weddings. Surprisingly, men appear to be more organised. While Abbey’s research showed that 9 million women were caught out with an forgotten birthday or wedding gift, only 5.8 million men found themselves in the same situation. Men were also more generous, shelling out £367 on average in unplanned gifts last year compared with £226 spent by women.

Reza Attar-Zadeh, Head of Savings at Abbey, said: “You never know what life is going to throw at you. However, you can prepare for the unexpected through building up a ‘buffer savings fund’ to help deal with these shock events. Most experts recommend that you build up a fund of at least three months salary in an instant access cash account.

“Abbey offers market leading rates across our range of products that encompasses our leading 50+ Saver and eSaver accounts. Our 6.15 per cent available on our Cahoot Savings account on balances over £500,000 remains the highest instant access account on the market.”