Only a quarter of Britons are regularly saving money, and one in five has no savings at all, research suggests.
Almost half of those surveyed by Which? said they had no idea how they would cope with an unexpected expense. Those closest to pension age struggle the most, with half of the 23 per cent of people aged 50 to 64 who dip into their savings doing so not to treat themselves, but to buy food. Two thirds of people in this age group say that they are not confident that they will have enough money to live comfortably in retirement.
Young people are abandoning all attempts to save. Separate research has found that a third of aspiring first-time house buyers are so fed up they no longer bother to save.
Half of the under-35s surveyed by the L&Q housing association said that they had “given up all hope” of ever owning their own home. Which? believes that low interest rates are compounding the problem, creating little incentive to save. The average instant-access account pays 0.66 per cent, compared with 4.21 per cent in October 2007.
Last month, the banking watchdog expressed concern about the number of savings accounts offering “teaser rates” that expire after a year, rolling savers into “zombie” accounts paying a pitiful return.
Mr Lloyd said: “We’re pleased that the Financial Conduct Authority is looking into the savings market and we want the regulator to take action to help savers to get the best deal.”