Britons 'one month from financial meltdown'
People are not saving enough money, the Pru says
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Wednesday, 09, Aug 2006 12:49
Millions of UK residents are only one month away from financial crises, a new survey claims, due to the majority of people being wholly unprepared for losing their jobs or suffering from a long-term illness.
Financial services firm Prudential says that almost three million employees, one-tenth of the country's working population, believe their jobs are under serious threat, while one-third of people say their savings are wholly insufficient to cover them for a period of unemployment.
Analysts claim that 18 per cent of workers were forced to take sabbaticals during 2005 due to long-term illness, while not all companies continue to pay people's full salaries during sick leave.
In addition, those that do are not legally obliged to indefinitely, meaning that people with inadequate savings only need to miss one month's pay cheque to face financial ruin, the Pru claims.
Angus Maciver, insurance director at the company, said: "No-one likes to think that they could get a severe illness or lose their job, but what if the unthinkable happened?
"These times would be difficult enough without having to worry about covering the mortgage and potentially losing your home. Yet without any savings or protection, many people put themselves in this vulnerable position."
Only 27 per cent of Britons say they have saved enough money to theoretically tide them over if they lost their jobs, while one-quarter admit they are wholly dependent upon friends or family in such circumstances.
Commenting on today's survey, Rachel LeBrocq, spokesperson for the Building Societies Association, said: "I think the key point this raises is that everyone should try to build a savings nest egg as life doesn't always run smoothly. Events such as the loss of a job or sudden drop in income, if the cost cannot be covered, can tip people into debt."