BRITISH HOUSEHOLDS ARE UNPREPARED FOR FINANCIAL UNCERTAINTY IN 2021

AS A THIRD lockdown takes hold of the nation, new research has exposed just how unprepared Brits are for another year of financial uncertainty.

A telling report from the experts at digital financial coaching app, Claro, reveals that 10.5 million British adults (or 1 in 5 of the UK adult population) have no financial cushion whatsoever – meaning they do not have enough money saved to support their household for even a month if they were to lose their main source of income.

The report goes on to reveal this lack of safety net become more pronounced in the younger generations, as it found almost 1 in 3 (31%) of 18-24-year olds confess they wouldn’t have enough savings to last even a month if they were to lose their job.

The data shows that young people aged 18-24 are currently struggling disproportionately, with a huge 41% of this age group in Britain having already experienced their income falling short of their living costs in the last year.

Furthermore, 16% of 18-24-year-olds confessed they haven’t made any attempt to save money this year at all, making them even more financially vulnerable as the pandemic continues.

However, it is not just Gen-Z struggling to save. It is revealed that 39% of British households do no budgeting whatsoever – and do not keep track of income and expenses.

This is most concerning as the nation inches closer towards the end of the furlough period and economic uncertainty caused by covid-19 continues.

Despite this, British adults are aware of their financial situation, as 67% say they keep a close watch on their finances, which suggests they are just unsure on how to improve them.

What’s more there are many small changes that that British people, including Gen-Z, can make to safeguard their financial future.

Achievable targets such as setting up a savings account or taking out insurance products like income protection, which often offer lower premiums for those under 35, will offer support to those who lose their income or find themselves on unstable financial grounds for whatever reason.

Rachel Harte, Head of Financial Planning at Claro, said: “Whilst we never want people to obsess about finances, it is concerning that 10.5 million adults in the UK have no financial safety net to fall back on – and even more worrying that it is the youngest generation struggling the most.

“With 1 in 3 unable to support themselves for longer than a month without their regular income, its good for Generation Z to start making good money habits early. A little forward planning goes a long way and can prevent unnecessary stress in the future.”