A new research study conducted by the Gocompare.com has revealed a sad truth about the Britons, 3 in 5 do not even have a savings of £1,000 which can be used during emergency situations. The respondents said that they must have at least £1,200 savings to get through on rainy days but 59% have less than £1,000, worse, 25% have no savings while 75% rely on their credit cards to pay emergency expenses. The most unexpected costs are car repairs, boiler replacements and even overly high bills. However, 28% of the respondents believed they must have at least £2,000 to be reasonably safe during emergencies.
When Britons reach the age of more than 65, they believe to save at least £3,000 to be in the best place and take care of emergency situations and other surprises of life. On the other hand, Brits aged 35 to 44 are the most unprepared in cases of emergencies and one-third of them have no savings at all. This is a sad reality but if they do not save for rainy days, most of them will be in so much debt from credit card companies and lenders by taking a loan. One of the lenders that is shaking the guarantor lending market is the Guarantor loans which allow a tenant to become a guarantor as opposed to a home owner. If the guarantor is a tenant, the maximum loanable amount is £5,000, a major increase from the previous amount of £3,000. This lender increased the amount because it is confident that the economy of the UK is improving. Not only that, their APR is reduced massively to 59.9% from 79.9%.
Financial experts say that it is important to save because it does not only cover emergency expenses but also smaller expenses especially if monthly paycheck is delayed. Included in the survey is a question on what the respondents understood about rainy day, 56% of them said it is an unexpected replacement or repair of home appliance. Bills of car repairs equate to 51% and home repairs account 50%, they were two of the most expensive issues to solve. Other costs included replacement of laptop, tablet, smartphone or TV and paying big energy bills. A few of the respondents say that paying their car insurance or rent is considered a rainy day.
The good thing is that 45% of the respondents say they will wait for the funds to arrive until they undertake repairs if they lack funds at the present situation.
In the UK, the increase of wage remains low, this is the reason why the Britons should practice good budgeting in order to manage all their expenses each month. However, even if they try hard to meet both ends at the same time to save, it is not often possible to save in preparation for emergencies.