‘In case of an emergency’ – More than half of UK consumers set to use up emergency fund as cost-of-living crisis bites says Charles Stanley

by | Aug 24, 2022

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Having money set aside can help to provide protection against abrupt financial changes, and the recent years have shone a light on the need for a financial safety net.

New research from Charles Stanley reveals that three quarters (71%) of UK adults have an emergency fund, with the average fund able to last four months and three weeks.

However, the current cost-of-living crisis is putting those emergency funds under threat. More than half of consumers (54%) are worried that the current economic environment will lead them to use up all of their emergency savings, leaving them unprepared for any future crises.

Using emergency funds


The average emergency fund would last just under five months. 28% of people claimed it would cover between two weeks and two months of expenses. 10% said it wouldn’t last two weeks, whilst 22% chose over three months.

Of those with an emergency savings pot, a quarter (25%) of people have never needed to use it. 9% dip in less than once a year, while others lean on it more regularly.

Contrastingly, just 12% of people have never topped up their emergency fund; a massive 36% of people top it up monthly, and 10% weekly.


The unprotected minority

29% of people don’t have an emergency fund; this is led by women (32% compared to 26% of men). This is one of many financial indicators painting a troublesome picture for women during the cost of living crisis.

Perhaps unsurprisingly, emergency fund coverage correlates closely with personal income. A massive 38% of those earning less than £20k a year do not have an emergency fund, falling to 28% of those on £20-30k, 17% on £30-40k, 20% of those on £40-50k, and 18% of those on £50-60k. Similarly, just 25% of those in employment don’t have an emergency fund, compared to 46% of people who are unemployed and job-hunting, and 34% who are unemployed but not looking for work.


Of those without an emergency fund, the most common reason for not having one was due to wages barely covering the cost of living, and therefore being unable to afford to save; this was true of 27% of people who didn’t have one. 22% said they couldn’t save as they were trying to pay off debt, and 14% hadn’t had time to set one up. 13% historically had a fund, but it has now been used up.

Only 17% of all people without an emergency fund said that they didn’t think having one was necessary. This was most true of men (28%) and young people (18-24 year olds, 25%).

The current crisis


The current cost-of-living crisis could decimate an otherwise relatively healthy emergency fund landscape. More than half of consumers (54%) are worried they’ll use up their entire emergency savings pot to keep up with rising prices. This is much more true for women (61% vs 46%), and especially true for those aged 35-44 (66%).

And on the other side of the coin, around the same number of people (53%) are worried that they won’t be able to save for their emergency fund due to the current economic environment, with 20% ‘very concerned’. Again, this is more true of women (61% vs 46%)

These levels of concern are higher than other money worries, including relying on family & friends for help (40%), needing to take out personal loans (35%), and having to downsize property (27%).


Lisa Caplan, Director of OneStep Financial Planning at Charles Stanley, comments: “It is both a surprise and a relief that emergency fund coverage is so broad. Saving into a ‘rainy day pot’ is not always people’s first priority, but those who have managed to prepare will be grateful for it during the cost-of-living crisis. As ever though, we are seeing common themes when we look at who slips through the net; the picture is less positive for women, low-earners, and those looking for work.

“For those dipping into their savings, it’s vital that it is a considered behaviour; it might be necessary, but there may be options which have been overlooked. Getting guidance from a financial adviser, a charity, or trusted consumer champion could help avoid people eating away at their hard-earned savings, especially at a time when savings are starting to generate interest.” 

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