Working households are only 19 days from the breadline on average, according to Legal & General.

In a new report the financial giant said that households have seen the amount of time they can fund basic expenses fall by 21%, five days less than in April 2020.

L&G found that households have average savings of £2,431 and debts of £610. Accounting for average daily expenses of £93, this would see them run out of money in less than three weeks if they were to lose their income.

Vulnerable households

The research also found that most people underestimate how long their money would last, assuming they would have 60 days of breathing room were they to lose their job, instead of the average of 19.

This has raised concerns that many people across the country could be vulnerable to financial shocks should the worst happen, as household bills have risen steeply.

Time to cut back?

Cutting back on both essentials (69%) and luxuries (81%) is already the new norm. Even the majority of those with no debt and a higher income (over £50k annually) are being more cautious.

Over six in 10 (61%) of those with a household income of over £50k said they are already cutting back on essentials.

L&G also found that two million adults have no money left each month, a rise of 330,000 in the last year years. Those earning under £20,000 a year – five million people in the UK – are living paypacket-to-paypacket and the average household in this group has no safety net should the worst happen.

Bernie Hickman, CEO of Legal & General Retail, said: “Our latest research presents a challenging picture for working households across the UK. We often talk about managing money month-to-month but, as our findings indicate, for some it’s a case of day-by-day.

“The cost-of-living crisis is squeezing the purses of people all over the country, leaving households of every shape and size with money worries. The fact is there is only so much people can do to manage their budgets in these difficult times but there are resources available that can help. Half of all people in the UK (52%) haven’t taken advantage of financial guidance available, including free services like MoneyHelper, to help make the most of what they have. It may feel overwhelming but we encourage people to do what they can now so they are best prepared for a further squeeze on finances coming this autumn.”