One in four financially vulnerable people have no savings

New data from Fair4AllFinance has found that one  in four people (24%) in financially vulnerable circumstances in the UK hold no savings at all.

The data showed that 10 million people across the UK have stopped saving entirely, or are saving less than they did a year ago. The 10 million figure represents more than half (51%) of those in financially vulnerable circumstances no longer being able to put money aside and build a safety net. Currently in the UK there are more than 20 million people living in financial vulnerability, an increase of 16% – equivalent to 2.7 million people – from 17.5 million in 2022.  

Causes of financial vulnerability range from ill health, low or unstable incomes or a lack of savings, to life events like losing a job, bereavement or a relationship breakdown. This worrying trend spans even further, with 41% of the general public also saving less than they used to, or not saving at all, increasing the risk that millions more people are losing their ability to build a financial safety net, or are having to rely regularly on what they have saved historically. While they are managing for now, a single life event or emergency could force them to rely on credit to get by.  

Fair4All Finance has identified six broad groups of adults living in financially vulnerable circumstances. Their varied experiences show how Britain’s money worries can transcend age, class, occupation and other social boundaries.  

People who are identified as ‘squeezed and sliding’ within the research are a core demographic of financially vulnerable people, those that may be homeowners or renters with lower incomes that are being squeezed by rising housing, childcare and other costs. Equivalent to 4.5 million of the general population, this group are just getting by. Previously having held the highest amount of savings, over the last year over half (52%) of squeezed and sliding households are saving less than they used to.  

While this group previously has been able to build a savings buffer, over the last two years 39% of those in the ‘squeezed and sliding’ category have had to use their savings as a form of income to make ends meet each month.  

The group which has been the most impacted by a diminished ability to save has been the 3.8 million financially vulnerable ‘forgotten families’ – low income families with very limited or no savings, falling behind on essential payments like rent and utilities. One in five (22%) have stopped saving completely, double the decline rate of the national average. With 35% saving less than they used to, and 35% having no savings at all, this leaves millions more at risk of even greater financial vulnerability and exposure to dangerous debts. 

To counter the rise of adults in financially vulnerable circumstances through diminished savings, Fair4All Finance is calling on the financial services sector to work together to make savings products and affordable credit more accessible to ensure that consumers have viable routes to turn to for an unexpected bill or emergency. More than a fifth (22%) of the UK’s 20.3 million financially vulnerable people tried to obtain new credit in 2023-2024 but were turned down and two in five (39%) people in financially vulnerable circumstances didn’t apply for credit in the last 12 months because they thought they’d be turned down.

People who find themselves in financially vulnerable circumstances can reach out to their local Credit Union to find out what savings products are available to them. With affordable and manageable savings plans allowing savings from just £1 per week, Credit Unions facilitate financial planning and support, helping their members to boost their savings in order to develop a safety net, and providing access to affordable credit, when they can’t stretch their income across the month. Some people may also be eligible for ‘Help to Save’ – a government-backed savings scheme for low-income earners that offers a 50% bonus on savings.

Kate Pender, CEO, Fair4All Finance, said “This research serves as an important reminder that the cost-of-living crisis remains a part of everyday life for many across the UK. Without savings safety nets, many face the risk of being tipped into problem debt by everyday events or unexpected expenses eroding their financial resilience.

“In April alone millions of households have seen energy, water and council tax bills rise and that’s before you take into consideration rising housing and childcare costs. The harsh reality is that for people in financially vulnerable circumstances this increased pressure on their finances feels never ending. No matter how much they try and save, they always have more month than money.

“Being able to build even a small saving pot is a fundamental part of what enables people to feel confident that they are prepared for anything life throws at them. With affluent people in society also saving less now, this is a worrying trend that could see the number of financially vulnerable people in the UK rise even further.

“The financial services industry should take note of these findings. Financially vulnerable people are likely to rely on their savings in day-to-day life, but these groups are considerably less likely to hold savings accounts or products. The wider industry must work to reflect the unique needs of people in financially vulnerable circumstances, and to make sure that these needs are understood when creating new products and services, especially where more flexibility in savings is needed.

“When done well, financial services providers encouraging savings can be transformational. Credit Unions have developed innovative products over a number of years such as Save as You Borrow schemes to payroll linked savings and loan products, helping members to establish better financial habits and build an emergency savings buffer for the long term.”

Groups living in financially vulnerable circumstances	Definition
Forgotten Families	Low-income families with very limited or no savings, falling behind on essential payments like rent and utilities
Credit Crisis Families	Families in a ‘crisis position’, including many in social housing, in a cycle of credit and debt to afford necessities
(Un)Golden Years	Adults aged 45+, some in the lead up to retirement and some who are already retired, with low and stable incomes. More than one in three have no savings and many are facing declining health or existing conditions.
Unsteady Starters	Younger renters with flexible or volatile incomes, who are not yet ‘established’ financially and regularly rely on loans
Squeezed and Sliding	Homeowners and renters with lower incomes and are squeezed by rising housing, childcare and other costs.
Difficult Debts	Renting families juggling high levels of long-term debt from multiple sources