One in three UK employees is prioritising building up emergency savings in 2022, according to new data, as financial uncertainty from the Covid-19 (Coronavirus) pandemic has promoted the need for a financial cushion.
Pensions and investments services company Aegon’s latest research, which was conducted among 2,000 UK working adults in December, found that 32% wanted to store the cash to pay for an unexpected expense while 16% were focused on paying back debt.
More than one-third of respondents (34%) were worried about an unexpected financial shock, with this figure being higher among those aged 55 and above at 37%. Other concerns include paying for basic living expenses (23%) and a lack of savings (22%).
The ability to retire on comfortable terms was another concern, along with supporting other family members. Employment insecurity also featured.
Nearly a quarter (23%) of those whose job was impacted by the pandemic said they now have less money saved than they did pre-pandemic.
Kate Smith, head of pensions at Aegon, said it was encouraging that individuals are looking to prioritise building financial resilience in the coming year. She added that many had suffered “significant financial difficulty” during the pandemic, and warned that those without a financial safety net could be underprepared to cover any unexpected expense and feel exposed.
Smith explained that acknowledging the need to build financial resilience was a good first step but should be followed by action, with a simple way of doing this being through budgeting, mapping monthly incomings and outgoings, and making regular payments to an easily accessible savings fund.
“The general financial uncertainty created by the pandemic has highlighted the importance of financial resilience,” she said. “Going into a new year with fresh uncertainty surrounding the Coronavirus crisis, developing good budgeting skills and savings habits and growing emergency funds will give peace of mind and help to build financial resilience for any future unexpected expense.”