Experts have expressed concern over the finds of the survey, compiled by the Financial Conduct Authority (FCA), warning a lack of savings could leave Brits falling into serious financial trouble if unexpected costs arise.
HSBC recommends that everyone should have an emergency fund of at least three months of essential expenses, covering things like rent or mortgage payments, utility bills and groceries.
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Seeking support had a positive impact, the report found. Out of 1.7 million people who used a debt advice or management service in the last year, 61 per cent said their debts were now less daunting.
As a result of these findings, the FCA has urged consumers to contact their lender if they are struggling with payments, or to get help with investment decisions and pensions to improve their long-term financial prospects.
How to boost your savings
Set a budget: In the cost of living crisis, it can be hard to save but by setting yourself a budget – and sticking to it – you could find some free cash to set aside.
“A good tip is to set up a payment to a bank or building society savings account that goes out of your current account on the day after you get paid. After a while you’ll get used to the money going out of your account and won’t miss it.”
It is worth using comparison sites to find the best deals, many of which are likely to be with smaller providers.
Currently, the best easy access account with unlimited withdrawals is Sidekick, offering a rate of 4.51 per cent. The best one-year fix is with Close Brothers with a rate of 4.47 per cent. Other better offers can be found but may have limited withdrawals or a higher initial rate.
Rachel Springall, finance expert at Moneyfacts, said: “Easy access accounts are great for savers who need some flexibility with their deposits, but those with specific goals would be wise to set up recurring payments.
Anticipate interest rate shifts: If interest rates are expected to fall, fixing your savings for a longer term could secure a higher return before rates drop. By locking in a favourable rate now, you might protect your savings from future declines and ensure your money works harder.
For example, after the Bank of England cut interest rates on Thursday last week, over 25 banks and building societies had cut their rates by Monday.
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