Coronavirus has wreaked havoc financially across the UK, and many have been forced to reckon with job losses, furlough or a drop in income. As a result, research has uncovered a significant number of Britons have dipped into their savings to cover the cost of lockdown. Research undertaken by the consumer website finder.com, showed over a third of Britons have been driven to use some of their savings since lockdown measures were implemented on March 23rd.
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The study of 2,000 Britons in May 2020, found that on average, those who took this approach have used £1,420 of savings over the first seven weeks of lockdown.
However, this news is potentially alarming, given the fact this figure adds up to a fifth of the UK’s average savings pot – with Britons typically putting away £6,760.
The issue is only compounded by the fact one in 10 Britons have been found to have no savings at all.
This means many may find themselves ill-equipped to cope with financial crises, and find it difficult to approach the lockdown.
Experts have previously recommended individuals have three months worth of living expenses in the bank for a rainy day.
And based on research, for an average Briton, this would total £4,700.
Several Britons have taken to Twitter to express similar problems with savings as a result of the coronavirus crisis.
One wrote: “My boyfriend and I had saved money for a deposit on a house, but due to coronavirus we’ve had to use all our savings.
“We’ll be moving in with his parents after all this to try and save the money up again.”
And another said: “Im having to self-isolate, but I’m self employed. I’ve just spent two hours on the phone trying to set up Universal Credit.
“I have no savings, and I live week to week on the little money I earn.”
The study also uncovered that 40.93 percent of Britons do not have enough savings to live for a month without income.
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There is also a clear generational divide in terms of those who have been forced to use savings.
‘Baby boomers’, commonly defined as those born between 1946 and 1964, have the most savings, with an average of £9,760 in their account.
However, the silent generation, usually deemed those born between 1928 and 1945, have used their savings less than any other generation, with only 16 percent of those asked stating they had taken this move.
Most likely to have to dip into savings, were millennials, those born between 1981 and 1996, as almost half were found to use their savings during this time.
The Money Advice Service has suggested budgeting can be a good way to make savings, and avoid dipping into emergency reserves.
Laying out income and expenditure in a spreadsheet or document can provide Britons with a clearer picture into their financial circumstances.
Commenting on the findings, CEO at finder.com Jon Ostler, said: “During this uncertain time, having a buffer of savings may be more important than ever. While losing your job isn’t nice to think about and may feel like a distant reality, we can never predict what is around the corner and having some savings in the bank is a good idea.”
Mr Ostler advised Britons to take several steps including using free budgeting apps, saving money that isn’t spent, and making sure savings are in the right place to allow them to grow with interest.
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