• One in five (21%) would need to take on debt to cover a £250 emergency expense
  • 5% say they simply would be unable to pay a £250 emergency cost at all
  • Almost a quarter (23%) are finding it difficult to live on their current income
  • Standard Life shares practical tips to help build financial security

One in five UK adults (21%) say they would need to take on debt to cover an unexpected £250 bill, and a further 5% say they wouldn’t be able to fund such a cost at all, according to new research from Standard Life’s latest Retirement Voice1 report.

Among those who say they would need to borrow to fund such an emergency, 13% would use a credit card, while others would borrow from family or friends (4%), take out a personal loan (1%), or a payday loan (1%).

This comes amid ongoing pressure on household finances - January can feel particularly challenging for many households after the festive season, and for people already feeling stretched, the picture is stark. The research reveals almost a quarter of people (23%) are finding it difficult living on their current income, with nearly one in three concerned about inflation and rising prices (30%) as well as household energy costs (28%) continuing to weigh on many budgets.

Despite these challenges, many people are taking steps to feel more prepared in 2026. Encouragingly, a quarter of UK adults (25%) say building a rainy-day fund to help cover unexpected costs is a financial priority for them over the next twelve months.

Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group commented: “As we head into 2026, pressure on household budgets remains very real. It’s worrying that so many people would struggle to cover a relatively small, unexpected cost without borrowing. With so many people already finding it hard to stay on top of their monthly finances, building savings can feel even more difficult.

“It’s encouraging to see people prioritising rainy-day savings. Small, practical steps can make a big difference over time, helping people feel more financially resilient while also planning for the future.”

Mike Ambery shares his top tips on how to budget best and be prepared for unexpected expenses:

  1. Put essentials first: “It sounds simple but start with the basics. Make sure your budget covers all of the necessities including rent or mortgage payments, utilities and council tax. Getting these right makes the rest easier to manage.”
  2. Keep an eye on your spending: Keep an eye on your spending: “Using a spreadsheet or an app can help you see exactly what’s coming in and going out. This makes it easier to spot unnecessary spending or forgotten direct debits and redirect that money towards savings or debt repayments. This doesn’t have to be a big task - many banks now offer simple digital tools that automatically break down your spending for you, so getting a clear picture of your finances can often be done in just a few minutes.”
  3. Review subscriptions and direct debits: “It’s worth regularly checking what subscriptions you’re paying for and cancelling those you no longer use or need. Small monthly amounts can add up. Recent Standard Life analysis shows the average Brit wastes £39 a month on unused direct debits, and redirecting this money into savings or a pension could add up to £37,000 to your future finances2.
  4. Save before you spend: “Setting up an automatic transfer into savings as soon as you get paid can really help. Even small amounts make a difference, and you’re far less likely to miss money you never got to see in the first place!”
  5. Build into an Emergency Fund: “Putting a small amount aside each month helps you build a buffer for those unexpected costs. Over time, this can grow into a safety net which reduces the need to rely on debt. Having three to six months of essential living costs is a good target to have in place.”
  6. Set goals you can stick to: “Creating small, achievable goals makes them easier to maintain, whether saving for a gift, holiday, or clearing a credit card balance, steady progress adds up.”
  7. Be cautious with borrowing: “If you must borrow, take the time to explore low-interest options first. High-cost credit, including payday loans, can quickly become difficult to manage if repayments fall behind.”
  8. Think about your future early: “Planning ahead, whether through pensions or investments, can help provide greater financial security later on. The sooner you start, the more time your money has to work for you.”
  9. Check in on your budget regularly: “As circumstances changes, your budget should too. Reviewing it often helps to ensure it still fits your situation and allows you to adjust spending or saving where needed.”
  10. Seek support if needed: “If money worries become overwhelming, free services like StepChange or Citizens Advice can help. Getting advice early can make it easier to regain control and get on track.”

-Ends-

Enquiries
Tisha De’Amoko
Lansons
07462 686777
tishad@lansons.com

James Merrick
Atandard Life
07974 063067
james_merrick@standardlife.com

Notes to editors:

1 - Retirement Voice 2025 | Standard Life
Research conducted by Ipsos on behalf of Standard Life in June 2025. In total 6000 participants took part in the online survey. Participants were aged 18-80 and were a mix of working, unemployed and retired people. Quotas and weights were used to ensure the respondents were representative of the UK general population on age, gender and region.

2 - Cancelling unwanted direct debits could boost your pension by £37k

* Calculations assume the following:

Starting Salary £25,000
Starting Age 22
Investment Growth 5.00%
Salary Growth 3.50%
Annual Investment Cost 0.75%

Calculations are intended only for the sole purpose of providing an illustration regarding the projection of savings and pensions. They should not be used with the intention to give an accurate representation of real-world outcomes. Figures allow for 2% inflation.

 

About Standard Life

  • Standard Life is a brand that has been trusted to look after peoples’ life savings for over 200 years.
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
  • Standard Life is part of Phoenix Group, one of the largest long-term savings and retirement business in the UK. We’re proud to be building on 200 years of Standard Life heritage together. Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs and plan a future they feel confident about.
  • The value of investments can go down as well as up and may be worth less than originally invested.

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