Savings Warning: Retirees Facing Emergency ‘Cash Flow’ – Calculate What They Need Now | Personal Finances | Finance

Ms Coles continued: ‘The emergency savings gap is not just a problem for low-income people: 23% of households earning more than £ 100,000 a year say they could not cover their expenses essential for three months.

“This may be partly due to the tendency for spending to increase to fill available cash, so there’s nothing left to save. If you live in a property with a large mortgage, have kids in a private school, or plan to take multiple vacations a year, then ultimately all of these things seem like necessities that you can’t cut back in order to free up some cash for the emergencies.

“” They may have other assets, including investments, that they think they can rely on in an emergency. And there will be higher earners who find that the three to six month target of that spending is so high that they decide it’s a waste to keep so much money in cash and they want to save it. elsewhere to make him work harder. They risk having to withdraw money from their wallet at the wrong time, which can lead to a loss. Sometimes, depending on the nature of the investments, this can be significant.

“Those with higher incomes and lacking in savings are much more vulnerable than they realize. A drop in income, even in the short term, could leave them falling short of their core commitments, which can have dire consequences for years to come.

“Millions of those who don’t have enough savings say they worry about it all the time. Almost two in five worry about it, and one in five worry about it every day.

“But while this is concerning, it at least allows them to prioritize saving whenever they can. What is even more alarming is the large number of people who do not have enough. savings and don’t worry about it at all, especially among retirees.

“One in ten (11%) does not have enough savings to be financially resilient, but is perfectly satisfied with the level of savings they have. This rises to 21% among retirees. Maybe it’s because they have no idea how much they should have, so having savings lulls them into a false sense of security.