A £2,000 savings pot can “more than halve” the risk of households falling behind on bills, a new study shows.
A household with this buffer could have 60% lower odds of falling behind on bills and a lower risk of problem debt than an equivalent household with less than £200 put away or no savings at all, according to the research from the University of Bristol’s Personal Finance Research Centre. Andrew Gall, head of savings and economics at the Building Societies Association, said: “Building a financial buffer is one of the best protections against life’s ups and downs. This important report shows that having £2,000 in savings can more than halve the risk of falling into financial difficulty.”
However, he pointed out that “even small sums” can make a real difference. The research indicated that setting a « realistic and achievable goal » and saving regularly are crucial for success.
Data showed that having just one month’s income put by potentially reduces the odds of falling behind with bills by nearly 75%.
Even those with between £200 and £499 in savings were significantly less likely to face financial hardship (8%) than those with less than this amount (24%).
It also found that having a basic savings account can be a « gateway » to opening other financial products, such as ISAs and investments.
The research was commissioned by the Building Societies Association (BSA) for UK Savings Week (September 22 to 28, 2025). The study was based on analysing data from the Understanding Society survey, which enabled researchers to track the finances of about 7,000 people over a 10-year period.
Mr Gall continued: “We appreciate that for some families £2,000 may feel out of reach right now. But the research has demonstrated that even small, regular savings, such as £10 a month, will build resilience over time and improve people’s wellbeing.
“Just as important, the findings show how a simple savings account is often the first step to achieving longer-term financial goals. People with good savings habits are far more likely to go on to have other savings and investments, which in turn can lead to positive outcomes such as becoming a homeowner.”
He added: “And this report makes clear that there’s more we can do. From payroll savings to better financial education, there are practical steps that can help the nation have better savings habits.”
Sara Davies, associate professor at the University of Bristol and part of the research team who worked on this research, added: “This research reaffirms the protective effect of holding a financial buffer, giving households a bit more room for manoeuvre should they face an unexpected expense or shock to their income.
“We hope that the report acts as a call to action for policymakers and those working in financial services to find new, innovative ways of supporting households – especially those on lower incomes – to build a savings habit.”
