Families urged to save for emergencies

26 August 2005
Families are being urged to put aside money for an emergency – even when pressure on the finances is tough.

According to Legal & General's MoneyMood survey the average unexpected purchase totals nearly £500. But one in 20 households face unexpected bills of nearly double that.

Without savings households may be forced to rely on expensive forms of credit.

But according to the MoneyMood survey of 10,526 adults, people are becoming less inclined to save. In July only 57 per cent of adults said they were in the mood to save, down from 60 per cent in June.

Julia Clayworth, head of direct investments, said: "MoneyMood indicates that each household should put by around £500 of emergency money that they can easily get hold of to prepare for just this sort of event."

She added: "The pressure on household finances appears to be quite high. This would clearly have an influence on whether people are in the mood to spend or save. The mood is unlikely to change until households get some relief for their finances."

And Ms Clayworth predicted that the Bank of England was unlikely to drop rates soon given the high level of consumer debt.

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