The Average family would have enough money for a mere 19 days
Families are now eating in to their hard earned savings as the average income per month would run out after just 19 days for average family
Left without their main source of income, the average family would have enough money for a mere 19 days before savings would be used up.
According to a ‘Deadline to Breadline Report’ by Legal & General, if the main breadwinner was unable to work, families would have less than three weeks before their savings ran out.
With the typical family storing £1,094 in savings, the research was conducted to warn people of the risks of being financially unprepared should the worst happen.
John Pollock, group executive director at Legal & General said the ‘breadline deadline’ of 19 days was “concerning”.
“Clearly, families aren’t prepared financially for when the worst happens - loss of income, critical illness or death - and the sad reality is that they need to be ready.
“We all know how tough it is out there for families at the moment. For many, simply making ends meet and staying in regular employment is a daily challenge,” he said.
However, he added that if regular income was cut off for any reason, it would render the “muddling through” approach that many households are taking right now impossible.
West Midlands households are the least prepared for a financial emergency, with just seven days worth of savings squirreled away.
This is compared to residents living in the South East, who would have 37 days on average before savings were completely extinguished.
The disparity is partially down to the fact that household income is higher in the South than further North. On average, London households earn the largest average incomes, at £41,435 a year; while the North East has the lowest at £31,057.
“At times like this it is even more important that people consider how best they can plan for a financial catastrophe,” said Mr Pollock – which is especially true for the 40% who said they had no savings at all that would support them through a financial emergency.
Opening a bank account is a good way to encourage your family to make savings – but make sure you compare products beforehand to find the best savings rate.