Research by easyMoney reveals that the cost of living crisis has decimated the UK population’s nest eggs, with some reporting to have spent 100% of their savings in order to keep themselves and their families afloat.
easyMoney has conducted a survey of 3,627 members of the UK population to find out how the current cost of living crisis has impacted their personal nest eggs and what reasons they have had for spending money they were hoping to be able to save.
Before the current cost of living crisis, 37% of the UK population had a savings nest egg outside of a pension.
Most people (18%) had managed to save between £5,000-£10,000; 17% had between £2,500-£5,000; and 17% had between £10,000-£25,000.
The most common location for these savings was a specific savings account (24%), while 23% kept the money in their current accounts. 20% used an ISA, and 14% used NS&I.
Less common saving methods included other avenues of investment such as stocks and shares (9%), bonds (4%), and other assets such as cars (2%).
The most common reason for building up a nest egg was general financial stability (48%), while 22% were hoping to supplement their pension. Others were saving for a holiday (9%), to create financial independence in order to retire early (8%), to secure a mortgage (6%), make a significant purchase such as a car (5%), or purchase a house in cash (2%).
However, since the cost of living crisis, 50% of savers have had to dip into their nest eggs, with 48% reducing their pot by up to 25%.
33% have had to use between 50%-75% of their savings, and 19% say they have now had to spend every single penny.
19% have had to use their savings to pay for rising energy bills, 18% to pay for other household outgoings, 13% used it to pay for food, and 10% have needed to fund unforeseen household repairs.
Other reasons for dipping into the nest egg include car tax, insurance, or MOT (9%), car repairs (8%), childcare costs (8%), a holiday (5%), expenses related to pets (4%), and personal healthcare (2%).
Jason Ferrando, CEO of easyMoney said, “It’s really quite upsetting to hear how so many hard-working people have had to use their savings to stay afloat during this cost of living crisis, especially given how hard it is to accumulate a meaningful savings pot in the first place.
For most people, building up savings is done to enable just a little bit of financial flexibility; a slight sense of freedom and control over their lives should anything unexpected happen. For others, it’s about preparing for retirement. But too many have now seen these savings disappear which means they now have to start all over again.
As they begin to rebuild, we would encourage them to consider alternative investment avenues, such as Innovative Finance ISAs, that can deliver stronger than average returns and hopefully get back to their position of strength as quickly as possible.”