Savings warning: Brits face £7,000 ‘shortfall’ – act to ensure ‘financial security’ | Personal finance | Finance

Saving money has been a challenge for many people due to the constraints of the COVID-19 pandemic. However, for others, staying home has meant cutting back on expenses that can go towards their savings. Despite an exceptional increase in household savings, many do not have what they need to feel financially secure.

Tina Hughes, director of savings at the Yorkshire Building Society, commented on the matter.

She said: “While many people have managed to save more money over the past 18 months, this latest research proves just how fragile people’s savings are and how far they are from reaching a state where they feel they have enough reserves to be financially. secured.

“While some people have been able to save throughout the pandemic, this has not been the case for everyone, with many now more exposed to financial shocks than before.

“As a society, we know how difficult it is for people across the country to save for their nest egg, and we are committed to helping more people build their financial resilience.

“Money worries can have a negative impact on people’s well-being and so we are here to help when needed.”

Ms Hughes added that it was positive to see that the UK’s overall financial resilience had improved.

It is hoped that as Britain emerges from the pandemic, the good financial habits will continue for those who have been able to save during this difficult time.

However, for those who haven’t already, it’s probably essential to start saving.

Learning from this unprecedented time could significantly help individuals make progress in saving for the long term.

Generally, Britons are encouraged to set aside three to six months of savings for emergencies.

This provides a significant financial buffer and a safety net, should the worst happen.

Apart from that, however, with interest rates at staggeringly low levels recently, individuals are encouraged to consider other options.

Some may want to consider investing, although they should always be aware that this type of action carries risks.

Although there is potential for good returns, people should note that they could end up with less than they initially invested.

Other than that, ISAs are often seen as good ways to save due to their tax-exempt nature.

Individuals will be able to invest up to £20,000 a year in an ISA if they feel this option is right for them.

Sarah J. Greer