Britain’s £1,000 savings gap: warning for 19% of households | Personal Finance | Finance

A startling warning has been issued to Britain regarding a £1,000 savings gap, which sees nearly one in five households left with less than £1,000 in savings and at risk of financial catastrophe.

Research published by AJ Bell in December shows that a startling 19% of households in Britain have less than £1,000 saved in their emergency cash pot, with women and younger people most at risk from unforeseen costs.

By contrast, the same amount of over-55s have an average of £20,000 or more in savings, suggesting a generational divide that leaves younger people ‘exposed’ according to the finance firm.

AJ Bell suggested that households should build up an emergency fund of at least three months’ worth of essential expenses, and consider investing money for the long term, too.

It warned that ‘many young people’ in particular are risking ‘leaving themselves exposed if they lose a job’ or ‘face another financial emergency’.

Laura Suter, director of personal finance at AJ Bell, said: “New research from AJ Bell paints a pretty concerning picture of the nation’s financial resilience, with one-in-five having less than a grand in their emergency cash pot.

“Perhaps more stark is the disparity between age groups. Younger people tend to have less money saved in an emergency savings pot than older people, with almost two-fifths saying they have less than £2,000 saved.

“On the other hand, 21% of over 55s are sat on an emergency cash pot worth £20,000 or more. This makes some sense when you consider that older people will generally have slowly built up a substantial cash buffer over the years, but it doesn’t address the problem of many young people leaving themselves exposed if they lose a job or face another financial emergency.

“Women also tend to have less saved than men, with no signs of the gender savings gap slowing – in fact, it’s risen.

“A quarter of women have less than £1,000 saved in their emergency cash pot, compared with 15% of men. This is by no means a new trend – research by AJ Bell Money Matters in 2023 revealed that men typically have 16% more saved in an emergency cash pot than women.

“In the latest figures, men on average have £1,746 more saved than women, representing a larger gender savings gap of 19% in 2025.

“Looking at the average amounts saved, there’s evidence that a small number of people have large amounts saved. The average amount saved of £8,245 may appear relatively healthy, but when you factor in that the median is almost half of that at £4,500, it becomes clear that those with larger amounts saved, by a sizable margin, are distorting the overall picture of the nation’s financial resilience.

“One golden rule is to have saved at least the equivalent of three months essential expenses to sustain you through any financial shocks. If that seems too ambitious, the most important thing people can do is start saving as early as possible, even if it’s just a small amount of money. Once you’ve built up that emergency pot it’s then worth considering investing your money for the long term. Over time that money has the potential to grow to a more substantial pot and provide an even more stable financial cushion.”