Consumers are currently facing a £371bn savings shortfallwhen it comes to feeling ready to cope with a financial shock, according to a new report.
Adults in the UK require a nest egg of £17,465 to feel financially secure while the average Briton needs an additional £7,220 to reach this goal, Yorkshire Building Society’s The Nation’s Nest Egg report has found.
The report was carried out in partnership with the Centre for Economics and Business Research (Cebr) and found many Brits have increased their savings during the pandemic.
The country’s overall financial resilience has improved over the last year, rising to 57 out of 100, up from 44 in 2019, despite the Covid pandemic.
The score comes from an assessment of four key pillars of financial resilience including shock resilience, probability of income shock, financial health and ability to plan for difficulty.
Many consumers said lockdown had caused them to reassess their approach towards savings with almost half (46 per cent ) of 18-34 year olds stating they would save more carefully after the pandemic.
One third (32 per cent ) of men and almost two-fifths (41 per cent) of women said greater financial security would make them feel less anxious or depressed.
Most respondents said to feel more financially resilient they would like more money in cash savings (37 per cent), followed by reducing their debt (25 per cent) or owning a property (23 per cent).
London scored 48 for financial resilience, just behind the East of England (61) and Scotland (56).
Opportunities to spend were curtailed during lockdowns while remote workers experienced a reduction in outgoings. This resulted in additional savings of £190bn over the last 18 months.
Nitesh Patel, strategic economist at Yorkshire Building Society said: “The changes in the city and regional rankings are perhaps reflective of the different lockdown restrictions that were implemented up and down the country.
“In some regions and cities, the increase in financial resilience may have been caused by tougher, longer Covid restrictions being in place, meaning people in those areas were able to save more. However, this theory isn’t necessarily reflective across all regions.”