Financial resilience falls to 19 days

In 2020 the average household could last 24 days should they lose their income.

The average household would now run out of money in just 19 days, according to Legal & General’s latest Deadline to Breadline report.

UK savers also overestimated how long they could fund basic living costs if they lost their income by almost six weeks.

Older workers (between 55 and 65 years old) had higher levels of financial reserves and were able to meet their expenses for an average of 99 days if they were to lose their income.

Most households surveyed said they were cutting back on both essentials (69%) and luxuries (81%) as cost-of-living rises start to bite.

Those with no debt and an income of over £50,000 per year were included in those being more cautious with 61% cutting back on essentials.

The report also found that nearly two million UK adults have no money left at the end of each month, a rise of 330,000 in the past two years.

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Bernie Hickman, CEO of Legal & General retail, said: “Our latest research presents a challenging picture for working households across the UK. We often talk about managing money month-to-month but, as our findings indicate, for some it’s a case of day-by-day. 

“The cost-of-living crisis is squeezing the purses of people all over the country, leaving households of every shape and size with money worries. The fact is there is only so much people can do to manage their budgets in these difficult times but there are resources available that can help.

“Half of all people in the UK (52%) haven’t taken advantage of financial guidance available, including free services like MoneyHelper, to help make the most of what they have. It may feel overwhelming but we encourage people to do what they can now so they are best prepared for a further squeeze on finances coming this autumn.”

Legal & General surveyed 5,021 UK consumers online between 28 June and 5 July.

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