It has been revealed that people are using up to £100 of their savings per month on paying household bills and other essentials.
This drops people's savings to the lowest since records began 2 years ago. It is suggested that people have about 6 months' pay as savings to cover the risk of redundancy (on average it takes 6 months to find another job), but now the majority of people have just 40 days' worth. Young people are more at risk, with an average of £348 in savings, equivalent to around a weeks' wage.
A third of Britons admitted to dipping into their savings to pay household bills, 31 per cent for holidays, and 11 per cent for back to school costs. This report also stated that 1 in 5 people were using their savings to pay off debts.
Richard Doe, chief executive of savings monitor ING Direct, said: "These figures show us the very difficult financial choices that ordinary people face.
"Britons are absolutely determined to get their personal finances in order by clearing debt. Yet rainy day savings are falling as people use them to meet the rising cost of living."
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