Two-thirds of young adults don't have recommended savings cushion
A recent survey conducted by the Yorkshire Building Society shows worryingly low savings levels amongst young adults.
MoneyHelper[i] recommends people have a savings cushion to cover three months’ essential outgoings in case of an emergency, such as being made redundant; however, the Society found that only 33% of those aged 18 – 34 had this level of savings.
The research also showed that 29% of this age group have less than one month of savings.
The good news is that 41% of 18 – 34 year olds reported that they had been able to increase the amount the saved each month during Covid-19.
The Society wants these young people to keep on saving and build up a cushion to ensure they are protected, particularly given the recently announced UK unemployment figures, which showed those aged 16 to 24 years suffered the largest rise in unemployment between May and July.[ii]
Yorkshire Building Society surveyed people across the country as part of its ongoing campaign to improve financial resilience – with a goal of getting an additional 1.8 million non-savers to start putting money away over the next five years.
Tina Hughes, Director of Savings at Yorkshire Building Society, said::
Now more than ever, in the current economic uncertainty, it’s important that we help people to save and build up their financial resilience. One of the things the Covid-19 pandemic has demonstrated is that anyone could find themselves in financial difficulties and as our research highlights, 29% of young people have less than a month of savings to sustain themselves and only a third have managed to build up a strong buffer of three months or more.
We want to continue to help people establish a healthy savings pot and improve their financial wellbeing and are trying to promote a save-first culture to help people put aside money that would enable them to withstand a financial shock without relying on credit or debt.”
The Society has a range of support tools available online for people to budget and take practical steps to save more.