The typical British family has less than three weeks' worth of spare cash, worrying new research shows.
The average household could survive financially for just 18 days if it lost its normal sources of income and had to live on the money it had saved for a rainy day.
This is according to research by life insurance provider Legal & General.
Reliance on relatives or state
After this point, families would be forced to turn to state benefits or handouts from friends and relatives.
These findings are outlined in Legal & General's latest annual Deadline to the Breadline report.
Legal & General also found that people widely overestimated how long they would be able to get by if they could no longer work.
The firm said that families thought they had on average 57 days' worth of spare cash.
Spokesman John Pollock said: "Recent economic indicators are encouraging and suggest a recovery may be on the horizon.
"However, we are not out of the woods yet.
"Our latest Deadline to the Breadline report shows that the financial situation for most UK families remains very difficult.
'Earnings being squeezed'
"British households are clearly still under a great deal of pressure: earnings are being squeezed and saving is difficult."
The average figure of 18 days to being on the breadline is one day fewer than in 2012.
The Legal & General report aims to highlight the importance of life or income protection insurance to soften the financial blow of redundancy, ill health or worse.
Pollock added: "Families have seen their disposable incomes fall by £21 per month in the past year.
"And a shocking 37 per cent of households report having no savings at all.
"Unforeseen events ranging from illness to redundancy often lead to a sudden loss of income.
"Our research suggests that in such an event, over a third of households would not have enough savings to maintain their standard of living."
Seven days to breadline for 25-44 year-olds
The study found significant age and geographical differences.
For earners between 25 and 44, the average time before money was likely to run out was just seven days.
People in the West Midlands typically had 40 days' worth of emergency savings, while those in the north-east of England and Yorkshire had on average a week.
Savings levels have fallen significantly over the past 12 months, the research showed.
In 2012, families had almost £1,100 put aside, but this has now fallen to an average of just £660.
35% have nothing in place to cover loss of income
Savings were found to be the most common form of protection against loss of income, with 41 per cent of households using this approach.
Almost a third had taken out some form of insurance – either critical illness or life cover – against being unable to work.
But 35 per cent of respondents said they had no plans in place to cover them in this eventuality.
Pollock said: "Despite the green shoots in the UK economy, many households are still clearly at risk of financial disaster.
"This report should act as a wake-up call for families to ensure they are taking steps to protect themselves from the worst."
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