Savings warning as Britons ‘need £40,000’ for cost of living crisis – do you have enough?

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Cost of living crisis: Bristol shopper discusses changing habits

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With inflation expected to hit 11 percent this Autumn, millions of Britons are feeling the squeeze with many relying on their savings to top up their monthly spending. Research by Hampshire Trust Bank found that nearly a third of those asked have not made any changes to their financial behaviour through the crisis. Instead, respondents in this group are relying on their savings to get by.

On average, this group has an average savings pot of £43,528.

The bank stated that this figure is “significantly higher” than the average saving pot of the other 73 percent of respondents.

The other group has an average savings pot of £39,883.

The bank stated that this still is “substantially more” than the majority of the UK population.

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According to recent Government figures, nearly half of families in the UK have no savings whatsoever.

The bank’s research also found that currently, Britons feel like their current saving pot is “not enough” to make them feel “financially secure”.

Around 11 percent of respondents to the survey stated that they would need another £50,000 to £100,000 in their savings pot to feel like they could “weather the cost of living storm”.

While nearly a quarter, 24 percent of respondents, said that they would need more than an extra £100,000 to feel safe.

The cost of living crisis is also causing many Britons stress, with 70 percent of those responding to the survey communicating the rising cost of utilities among their “biggest concerns”.

In a similar vein, over half of Britons are worried about the rising cost of fuel.

A similar proportion noted the same about the climbing cost of food and drink.

Stuart Hulme, managing director, savings at Hampshire Trust Bank, said: “Although wealthier savers haven’t yet felt the need to radically change their spending habits, our research tells us they are becoming more concerned about the cost-of-living crisis.

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“Whilst this more affluent group has taken a little longer to start feeling these impacts, our research shows they are indeed starting to be concerned about the impact of rising costs – especially, as with the rest of us, the impact of climbing utility bills and fuel costs.”

Of those who are cutting back on their spending habits, over half, 53 percent, are making active decisions every day to cut back and one in four have only driven their cars when it is necessary.

The cost of food is once of the biggest areas that people are targeting to try and save money with many now starting to shop around to make their food shop cheaper.

Many communicated to Hampshire Trust Bank that they had changed where they bought their food in the last six months.

The British Retail Consortium’s (BRC) latest shop price index revealed that supermarkets in Britain have increased their prices by 4.4 percent in the last 12 months.

This is the largest rise since these records began in 2005.

Mr Hulme added: “With no easy solution to the current crisis in sight, those who we refer to as being the squeezed middle are likely to grow in number, and will include more affluent savers who traditionally held more savings in the bank.”

“This growing group of savers will need to assess the liquidity of their assets and work out the best balance of short and long-term in their savings and investment portfolios to be prepared for what looks set to be a prolonged period of inflationary pressure and associated rising costs.”

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