- One in 10 adults reportedly have no savings at all.
- Nearly half may struggle to handle major emergency expenses.
- Many people are relying on credit cards and current accounts instead of savings.
Britain’s financial safety net appears thinner than many may realise. Fresh research commissioned by The AA suggests a large number of adults across the UK are financially exposed, with limited emergency savings and growing dependence on borrowing to manage unexpected costs.
The findings, based on a survey of more than 13,000 AA members conducted by Yonder in February, paint a broader picture of how fragile household finances remain despite easing inflation pressures. From emergency bills to long-term financial resilience, the data suggests many households could still struggle to absorb sudden economic shocks.
Here are seven of the most striking findings from the research.
1. One in 10 adults reportedly have no savings at all
Around 10 per cent of respondents said they do not have any savings to fall back on. That leaves millions potentially exposed if they suddenly face job loss, urgent repairs or unexpected household expenses.
2. Half of people have less than six months’ essential expenses saved
About 50 per cent of those who disclosed their savings position said they had less than six months’ worth of basic living costs set aside. Financial experts often recommend maintaining an emergency fund covering at least three to six months of essential spending.
3. Nearly one-third have less than three months’ financial cover
The situation becomes even tighter for many households lower down the savings scale. Around 30 per cent said they had less than three months’ worth of expenses available, including those with no savings whatsoever.
4. Many households may not know how they would handle a £5,000 emergency
When asked how they would manage an unexpected £5,000 expense, one in four respondents admitted they did not know how they would cover the cost. The uncertainty rose sharply as the size of hypothetical emergency bills increased.
5. Almost half could struggle with a £20,000 financial shock
For larger unexpected costs above £20,000, nearly 48 per cent said they would not know how to manage the expense. Even at the £10,000 level, around 38 per cent reported uncertainty over how they would pay.
The findings suggest many households remain vulnerable to major financial disruptions despite broader improvements in headline economic indicators.
6. Credit cards and current accounts are filling the gap
Instead of relying on dedicated emergency savings, many respondents said they would turn to day-to-day finances or borrowing. For an unexpected £500 bill, 43 per cent said they would use money from their current account, while 31 per cent said they would rely on credit cards.
Only 15 per cent said they would use easy-access savings for a £500 emergency. That figure reportedly falls further as hypothetical bills become larger.
7. Older people appear more financially prepared than younger adults
The research indicated older adults were generally more likely to rely on existing funds in their current accounts to absorb surprise expenses, suggesting stronger financial buffers among older age groups compared with younger households.
Adam Robery, head of loans and savings at The AA, said unexpected costs are a normal part of life and that even modest savings contributions could gradually help households improve financial resilience, as quoted in a news report.
The research arrives at a time when many households continue adjusting to higher living costs, elevated borrowing rates and lingering economic uncertainty. While inflation has eased from recent peaks, the figures suggest financial confidence and emergency preparedness remain under pressure across large parts of the UK population.
