00:03Saving money has become one of the biggest challenges facing households as rising prices
00:08continue to squeeze budgets.
00:10New figures suggest many people are living without any financial safety net at all, leaving
00:16them exposed if something unexpected happens, like a job loss or a sudden bill.
00:21The findings come from the Financial Conduct Authority's Financial Lives Survey, which
00:27looks at how people are managing their money.
00:30It shows around 1 in 10 adults have no cash savings whatsoever, while roughly 1 in 5 have
00:36less than £1,000 available in an emergency.
00:40There's no doubt if people feel that they're not as well off as they used to be, that creates
00:46a fair degree of anger.
00:50The political optics were that we certainly got poorer as a consequence of the global financial
00:56crisis.
00:57And that's way back in 2008, which of course was under a Labour government.
01:02People started feeling significantly poorer.
01:05Again, perhaps because of course wages flatlined in the immediate aftermath of a year or so.
01:12Prices continued to go up as they always tend to do.
01:15People's wages did not.
01:16But of course they were kept in employment.
01:18That would seem to be a good thing.
01:19Now we've got a situation where, what are we talking about, sort of 15, 16 years on from
01:24that, and probably longer in fact, I'm thinking of the election where the coalition got in,
01:29which again was about who's going to make you feel better off.
01:32We had austerity.
01:34That has led, if you like, to a flat lining of wages broadly, which have not kept up with
01:39prices.
01:40Hence, people are sort of becoming, as they sort of feel, poorer and their prospects are
01:46not as good as there would have been a generation ago.
01:49The regulator says millions of people have low financial resilience, meaning they would
01:54struggle to cope with even a short-term drop in income or an unexpected expense.
01:59Rising housing costs, higher food prices and increased energy bills have all made it harder
02:05for households to save, even when they want to.
02:09The FCA warns that without a financial buffer, many people remain vulnerable to debt and financial
02:15stress.
02:16So what does this all mean?
02:18Well, there's a great difficulty because of course the last government, we had the sort
02:23of chaos caused by Brexit and whatever else, and umpteen prime ministers and so on and so
02:28forth.
02:29Keir Starmer came into the election in 2024 promising we were going to sort of be better off and they
02:35were going to sort of to invest in economic growth.
02:38Now, to be fair, in the economic cycles it's really difficult to sort of to see instant
02:43growth.
02:44It doesn't work that way.
02:45It takes a sort of a fair time to wash through the system and we start seeing the benefits,
02:50but there is no doubt that sort of people are sort of feeling that they're no better
02:54off and in many cases worse off because of course inflation is still sort of sticking
02:58at sort of 3-4% and wages are not sort of keeping up with that.
03:02Now, of course, the difficulty is that the government would say we don't want an inflationary
03:06cycle caused by rising wages because that would take us back to the 1970s.
03:12So it's always about what is good economic policy.
03:16The regulator says improving financial resilience will take time, especially while the cost of
03:22living remains high.
03:23But it also stresses the importance of building savings where possible, even in small amounts,
03:29to provide some protection against future shocks and uncertainty.
03:33But there is a sort of real worry, the sort of the fact that people have no buffer.
03:38You know, if something happens, there's an old adage that everyone is only two paychecks
03:44away from sort of homelessness insofar as if something dramatic happens and you have
03:48to suddenly, you know, draw upon resources that maybe not there in the first place,
03:53then, you know, and you lose your house, where do you go from there?
03:55Yeah.
03:56So it's a really difficult sort of conundrum to sort of solve.
04:01And Rachel Reeves, perhaps, by her sort of hand-fistedness, and some people sort of say
04:07absolute mistake in civic economic policy, seems to have made sort of the situation worse,
04:11not better.
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