Ms Coles continued: “The emergency savings gap isn’t just an issue for lower earners: 23 percent of those households bringing in over £100,000 a year say they couldn’t cover their essential outgoings for three months.
“This may be due in part to the tendency of expenses to expand to fill the cash available, so there’s nothing left over for savings. If you live in a property with a large mortgage, have children at private school, or expect to take several holidays a year, then eventually all these things feel like necessities that you can’t scale back in order to free up cash for emergencies.
“”They may have other assets, including investments, which they feel they could draw on in an emergency. And there will be higher earners who find the target of three-six months of these outgoings is so high that they decide it’s a waste to keep that much in cash earning next to no interest and want to put it elsewhere to make it work harder. They risk having to withdraw money from their portfolio at completely the wrong time, which can mean facing a loss. At times, depending on the nature of the investments, this can be significant.
“Those on higher incomes who lack savings are far more vulnerable than they think. A drop in income, even in the short term, could leave them falling short of their essential commitments, which can have far-reaching consequences for years.
“Millions of those who don’t have enough savings say they worry about it all the time. Almost two in five are worried about it, and one in five worry every day.
“But while this is concerning, it at least allows them to prioritise savings whenever they can. What’s even more alarming is the huge number of people who don’t have enough savings and aren’t worried about it at all – particularly among retirees.
“One in ten (11 percent) people don’t have enough set aside in savings to be financially resilient, but are perfectly happy with the level of savings they have. This rises to 21 percent among those who have retired. This may be because they have no idea of how much they should have, so having any savings at all lulls them into a false sense of security.”