Three quarters of householders say they expect some sort of major expense to crop up over the next year, yet only 40% intend to save 'just in case', new AA research reveals.
Carried out by AA Home Membership, the research* shows that a third reckon they'll need to fork out to repair or replace their car, while more than a quarter suspect their central heating will pack-up at some point.
Despite these concerns, just 45% of householders plan to put money away, even though savings were considered the most popular way to pay for an unplanned expense. Twenty–one per cent said they would rely on a credit card if their savings fell short, while 17% would ask a family member to lend them money.
Worryingly, 15% said that if faced with a shortfall, they would have to sell something and 11% would be forced to take out a loan.
“We often worry that something expensive will crop up that we'll need to quickly pay for. When it happens we often wish we'd been better prepared” says Helen Brooker, Head of AA Home Membership.
“Many people have very good intentions and say they’ll put a bit of money away each month for emergencies. In theory it makes sense, but in reality, few get round to it.”
It's not just the lack of saving that affects Brits' pockets, but lack of saving knowledge. AA research shows that 70% can't identify the current cash ISA limit.
Mark Huggins, Head of AA Financial Services clarifies for those looking to save: “By putting a little money away as often as you can, you'll soon build up your savings pot with the added benefit of interest.
“There are plenty of types of savings accounts to choose from. ISAs, for instance, allow the account holder to save £5,760 tax–free each year.
“There are other types of account available too. We offer a fixed–rate account which allows you to put your money away for a set period. Fixed–rate accounts tend to be used by people who have a lump sum to save. We also have an easy access account which – as the name suggests – means that you can deposit and take out your savings as you please.”
*Research carried out by OnePoll on 17–21 May 2013 amongst 2000 adults aged 18+
(7 November 2013)