Families 'need emergency fund'
Every household should be encouraged to build up at least £1,000 as an emergency fund, StepChange Debt Charity has urged.
The charity is calling on the next government to build "rainy day" savings pots into the scheme for automatically placing people into workplace pensions.
Like saving into a workplace pension, the government and employers could also contribute to the pot, through tax relief and employers' contributions.
The savings pot would be transportable meaning that the pot would be retained if people moved employers or fell out of work and a target of £1,000 being saved for every household should be set, StepChange said.
R esearch carried out for StepChange estimates that half a million households across the country could be prevented from falling into problem debt if they had just £1,000 in precautionary savings.
The charity believes that successive governments' savings policies have failed to address the particular needs of lower income households.
It said that 27% of all households have le ss than one month's savings put by, rising to 42% of people earning less than £15,000 per year.
Mike O'Connor, chief executive of StepChange, said: " Encouraging more saving, especially by people on low income, is vital if they are to have a financial buffer to cope with financial shocks and avoid the slide into problem debt.
"Governments have started to address the retirement savings crisis by making saving easy, automatic and appealing. Now that system is established the next government should deal with the rainy day savings crisis in the same way."
Joanna Elson, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: "Despite the encouraging economic recovery, the number of people at risk of falling into serious financial difficulty continues to worry all of us who are on the front line of debt advice.
"We need to do more as a society to break the British taboo about talking about money and money problems, so that people seek advice earlier - and the government has a crucial role to play in ensuring that households are given the support they need."