Savings warning: Nearly half of over 55s have no savings for sudden setbacks | Personal Finance

Setting aside money as a “just in case” is something which many people may wish to do, but for one reason or another, it’s not always possible to save. Almost half of 55 to 64-year-olds (43 percent) have no savings set aside for major life events such as bereavement, illness, legal trouble, or periods of unemployment, according to Aldermore’s Annual Savings Tracker research.

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The research, shared exclusively with Express.co.uk, found that the average amount saved by the age group was relatively low – on average £14,069.

However, sudden life setbacks can come at high costs, especially as more than two in five have zero savings at all for such an event.

The retail bank said that the lack of emergency savings is an “acute” problem for this age group, due to them being particularly at risk should they encounter sudden setbacks.

Long-term unemployment can be very costly, and it can affect over 50s more, the bank said.

The Office of National Statistics (ONS) reports that 38 percent experienced unemployment for six months or longer, but it was nearly half (48 percent) for those 50 and over.

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Saving money: Woman looking worried and money in pictures

Saving money: Nearly half of over 55s have no savings for sudden setbacks (Image: GETTY)

Those experiencing 12 months or more of unemployment was 22 percent but 34 percent for over 50s.

Some serious health issues also tend to affect the over 50s age group more, with adults aged 50 to 74 accounting for more than half of all new cancer cases, according to Cancer Research UK.

Battling with serious illness like this can be expensive; research form Macmillan Cancer Support shows 83 percent of people living with cancer are £570 a month worse off, on average.

While findings suggest many have a lack of savings in case of emergency, Aldermore’s Savings Tracker data shows that those taking out insurance as protection remains low.

Just one third of 55 to 64-year-olds have life insurance, seven percent have critical illness insurance, three percent have liability insurance, and two percent have income protection insurance.

Meanwhile, figures suggest 12 percent have no form of insurance at all.

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It seems that many individuals may wish to have money stowed away for the future, however it’s a struggle to build up a savings buffer for emergencies.

A third of 55 to 64 year olds told how they try to save on a monthly basis but can’t, as they have nothing left to put away by the ned of the month.

More than a third (37 percent) of 55 to 64 year olds say they worry about their financial future and only two in five (39 percent) feel they are saving enough to ensure a stable financial future.

Ewan Edwards, Head of Savings at Aldermore, said: “No one wants to think about worst case scenarios in life but, as they can often come on suddenly and at high cost, it is important to be financially prepared.

“Going through an unexpected life setback can be extremely stressful and emotionally bruising, so it is vital that people plan and prepare to avoid financial pressures piling up that can make a bad situation worse.

“Getting into a savings routine can add a strong sense of security for people’s future as it acts as a buffer for the unexpected in life.

“It may never need to be used for setbacks or major emergencies, and eventually be used on happier things, but having it there is worth the peace of mind.”

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Saving money: third of 55 to 64 year olds told how they try to save on a monthly basis but can’t afford to (Image: GETTY)

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Aldermore has compiled a list of top tips to help individuals to make their money go further.

Aldermore’s Top Tips for building a fund for emergencies:

Check where your savings are currently being held

Interest rates may be near all-time lows, but the worst thing you can do is earn nothing at all.

Compound interest can definitely add up over time so it’s worth investing some time looking around for the right savings product.

Don’t just put aside loose change, try and save a set amount each month

Rather than putting aside only the money you have left over at the end of the month, try to save a set amount regularly and consistently.

Cut down on unnecessary spending

We all deserve a treat now and again, but unnecessary spending habits may be sabotaging your savings.

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Saving money for the future may be the aim but can be a challenge (Image: GETTY)

Small changes over time, such as making your own coffee or lunch a few days a week, can add up over time.

Cancel direct debits which drain your savings potential

Car insurance and gym memberships are two types of payments which are often cheaper if you pay yearly, instead of monthly.

While you will need a lump sum to pay in one chunk, you will be able to save money in the long-run.

Review your savings habits regularly

If you are having difficulty meeting your target amount, reduce your monthly contributions to make it more manageable.

If you receive a pay rise, a financial gift or find your monthly outgoings are reduced, consider increasing these contributions.