Brits rely on credit to fund basic household breakdowns

The old adage of having "rainy day savings" appears to be a thing of the past, with one in six people (16%) having to rely on credit to fund basic household breakdowns. Almost half (45%) confess they could afford no more than £500 if an emergency arose, according to research from Alliance & Leicester Savings.

When it comes to paying for an emergency, such as repairing a boiler or replacing a faulty washing machine, 5% of people are borrowing from a friend or relative and over 900,000 Brits say that they would sell something to meet the cost. Worryingly almost one in ten (8%) admitted to not knowing how they would cover the cost of something breaking down. The research also reveals Britons are feeling the pinch even further as their finances are impacted by increasing food and petrol prices.

One in five people (21%) say they would struggle to pay out for something that cost more than £100. With a plumber call-out charge costing around £100 and a new washing machine coming in at around £300, even a minor household problem could cause a strain. Only one in three (30%) would be able to cover a bill for a major expense (such as a new boiler) that would cost in excess of £1,000.

Hetal Parmar, Manager for Savings at Alliance & Leicester commented: "The reality of being a homeowner means that at some point you will inevitably have to pay out for repairs such as broken boilers and faulty appliances. We would encourage people to start saving sooner rather than later to avoid a basic household emergency becoming a financial headache."

In contrast, the survey also showed that over two thirds (70%) of Brits do have savings of some kind, a small increase on 64% in 2005, and a fifth (22%) are saving something regularly (putting something away every week or month). A quarter of people (25%) think saving is more important than ever at the moment.

Hetal Parmar continues: "Compared to our research from 2005, people are beginning to build up their savings pots for repairs around the home, but there is still a long way to go. The soaring cost of living will undoubtedly mean incomes are stretched but even by just putting a small amount aside each month you can easily build up a household fall-back fund in no time."

A fifth (20%) of those surveyed said they had struggled in the past to pay for unexpected emergencies such as a plumber's call out fee and almost half (45%) revealed they don't have money specifically set aside that could be used in this situation. More than a fifth (21%) said that they hadn't been able to immediately replace household appliances because of cash flow problems.

Over two thirds of Brits (67%) say, that over the past 12 months, they have felt the impact of increasing petrol prices and almost two thirds (63%) of rising food prices and hiked utility bills. Almost one in five people (18%) are also feeling the strain from the increasing cost of insuring their home and car, and almost one in six (15%) feel impacted by the decreasing value of the Pound against the Euro.