One in ten Brits have no cash savings, City regulator says
One in ten Brits do not have any cash savings, the City regulator has warned, concerning signs that hundreds of thousands of people could be unable to cover emergency bills.
New research by the Financial Conduct Authority (FCA) has also suggested that a fifth of people have less than £1,000 available to draw on
The findings will raise the alarm about how much more financial pain Brits across the UK can take amid a weak growth outlook and sticky inflation.
Data showed that, overall, one in four people have missed payments, are struggling to keep up with financial commitments or don’t have a reserve of funds available to pay emergency bills.
The FCA’s executive director of consumers and competition Sarah Pritchard said the survey showed “finances are stretched” and many were not able to stump up cash on a “rainy day”, while government-backed financial advisory platform MoneyHelper boss Oliver Morley said insecurity was impacting people’s health and relationships.
“We can help make your money and pension choices clearer by cutting through the complexity, explaining what you need to do and how you can do it,” Morley said on behalf of the free service provided to Brits.
The findings come as separate research conducted by the Centre for Economics and Business Research (CEBR) found that small and medium-sized firms were owed some £112bn in late payments, with businesses hoping technology can be rolled out at a faster rate.
An analysis of 1.2m anonymised invoices issued by HR software platform Sage, which commissioned the CEBR’s report, are “choking cash flow[s]” and slowing down investment, according to researchers.
Industry bodies including the Federation of Small Businesses and Enterprise Nation met with government officials on Wednesday, urging the Department of Business and Trade to focus on digitising payment systems via the use of artificial intelligence.
Be smarter with your savings, FCA says
The FCA’s new report on savings suggested there was greater appetite for technology to be used as part of banking services.
FCA analysts said it was “good news” that access to basic banking services had increased given more people were using advisory firms to help manage debt.
Brits are also banking online, with just two per cent of the population, or just over 1m people, considered to be “digitally excluded” compared to nearly 7m in 2017.
But almost two in five adults have little knowledge of how much their employers are contributing to pension plans while one third of adults with a defined contribution pension have less than £10,000 saved.
Some estimates provided by The Private Office and Legal & General suggest that retirees take an income of more than £10,000 a year.
The FCA is urging Brits to be smarter with their money by contacting lenders or pension providers for advice on payments and savings.