New report reveals 39 million Brits unprepared for financial shocks

A new report commissioned by Raisin UK uncovers a troubling reality: a staggering 39 million Brits are not actively setting aside money for an emergency fund. This lack of financial preparedness puts individuals at risk of debt when faced with unexpected expenses, such as home or car repairs, medical bills, or a sudden loss of income.

The Great British Savings Report highlights that only 30% of adults - approximately 16 million people - are setting aside funds specifically for emergencies. Alarmingly, many people prioritise saving for holidays (35%), Christmas (34%), and leisure activities (31%) over building a financial safety net. This shift in priorities raises serious concerns about the financial resilience of millions across the UK.

The report indicates that younger generations are particularly vulnerable, with just 23% of 18 to 24-year-olds actively saving for emergencies. In contrast, while 36% of 25 to 34-year-olds are doing so, more than half of those in the younger age bracket report having less than £1,000 in savings. Almost half of Brits (46%) - equivalent to 25 million people - have £1,000 or less in savings, which means many would struggle to cover living expenses for more than a month. Without adequate emergency funds, unexpected financial shocks could lead many to rely on high-interest credit options, creating a cycle of debt that is difficult to escape.

Elena’s story

One example of the critical importance of emergency savings is the story of Elena Griffin (not her real name), a 35-year-old PR consultant from Brighton who found herself in severe financial difficulty when her employer failed to pay her wages. Initially, Elena’s freelance work provided a stable income. But when payments ceased abruptly, she was forced to rely on her emergency savings and credit just to cover rent and living expenses.

“It was pretty bad,” Elena shared, explaining how unpaid wages impacted her day-to-day life. “Food, general living, and not being able to fully attend things like birthdays, hen dos, etc.”

After using nearly £5,000 of her savings and accumulating £4,500 in debt, Elena found herself caught in a cycle of financial strain. “I had to use around £5,000, which may not sound too much, but to me it was a sufficient amount,” she said, adding that the situation was “highly anxiety-inducing.” Even a year on, she’s still managing the impact of her debt.

Ultimately, when credit cards became necessary, she found the emotional toll immense: “It was an absolute rollercoaster… some days I’d be really struggling and so anxious that I just felt pure combustion within myself,” she reflected.

A call for greater financial preparedness

Kevin Mountford, co-founder of Raisin UK and a savings expert, commented on the findings: “It’s a concerning sign that emergency funds are not a priority for so many Brits. The consequences of not having an emergency fund can be severe, forcing individuals to resort to credit cards or loans that may lead to long-term financial difficulties. We must encourage a culture of saving for emergencies to help Brits build resilience against financial shocks.”

Mountford added, “While all kinds of savings are important, it’s essential that people prioritise their financial security. The reality is that unexpected expenses can arise at any time, and having an emergency fund can make all the difference in avoiding debt and ensuring stability.”

For more information and to read the full report, visit Raisin UK.