More than half of consumers (54%) are worried that the current economic environment will lead them to use up all of their emergency savings, new research has suggested.

A study from Charles Stanley revealed that seven in 10 UK adults (71%) have an emergency fund, with the average fund able to last four months and three weeks.

Having money set aside can help to provide protection against any abrupt financial changes, and Charles Stanley stated that recent years have “shone a light” on the need for a financial safety net. However, the investment manager has warned that the current economic landscape could decimate an otherwise relatively healthy emergency fund landscape.

With the majority of consumers worried they’ll use up their entire emergency savings pot to keep up with rising prices, the study found this is much more true for women, at 61% compared to 46% of men, and especially true for those aged between 35 and 44 (66%).

Of those without an emergency fund, the most common reason for not having one was due to wages barely covering the cost of living, and therefore being unable to afford to save. This was true for 27% of people who didn’t have one, while 22% said they couldn’t save as they were trying to pay off debt, and 14% hadn’t had time to set one up.

Of those with an emergency savings pot, a quarter (25%) of people have never needed to use it. There research, based on a study of 2,086 people, also revealed that 9% dip into their emergency fund less than once a year, while others lean on it more regularly. By contrast, just 12% of people have never topped up their emergency fund, while 36% of people top it up monthly, and 10% weekly.

Director of OneStep Financial Planning at Charles Stanley, Lisa Caplan, commented: “It is both a surprise and a relief that emergency fund coverage is so broad. Saving into a ‘rainy day pot’ is not always people’s first priority, but those who have managed to prepare will be grateful for it during the cost of living crisis.

“As ever though, we are seeing common themes when we look at who slips through the net; the picture is less positive for women, low-earners, and those looking for work.

“For those dipping into their savings, it’s vital that it is a considered behaviour; it might be necessary, but there may be options which have been overlooked. Getting guidance from a financial adviser, a charity, or trusted consumer champion could help avoid people eating away at their hard-earned savings, especially at a time when savings are starting to generate interest.” 

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